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Volatility, Sharp swings, sideways price action persist in Natural gas

So far this year, Natural Gas is trading like a sluggish commodity in the overall energy segment. Though it’s positively correlated with Crude oil in terms of historical trends (based on intermarket relationships), extent of price swings are more volatile this time, when compared to crude oil. Just look at the price swings, isn’t it very obvious to notice highly volatile sideways market condition. Prices are trading roughly within the range between 200-180.

Price Action Reflects the Volatility and Sideways Market Condition

Volatile Price action and Side ways market in Natural gas

We can even witness multiple traps and shakeouts in Lower time frame market structure. Strong selling pressure exists around potential resistance zone. Bulls made multiple attempts to break the key resistance zone at 200 – 205, all turned out as failures.

Price action forms a minor structural support zone at 185 -186 slightly below the key resistance zone. Overall it looks like a basement phase that occurs before breakout. From Wyckoff’s point of view, it’s known as “Absorption basement”. Technically it means Bulls are willing to absorb selling pressure to push prices higher. It indicates the intention of Buyers to break from the zone, Will they succeed this time? It’s necessary to keep in mind that bulls already multiple attempts and that resulted only in failures. So traders must observe the Price action, gauge buying – selling pressure and trade accordingly.

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About the Author:

Balaji is a Speculator, Investor and Trader (All in All!!!) and self published author. Trading in the Markets since decade, have seen more ups and downs along with institutional trader's lifestyle. He usually trades Nifty, Bank Nifty, Commodities, Futures cum Options around both Indian and global Markets. Balaji applies highly analytical and systematic Price Action strategies He blogs passionately about Trading strategies, Price Action Trading, Technical analysis, Macro events, Market setups, Financial and Economical topics. Apart from Trading and Blogging, Balaji also mentors aspiring Traders and Investors on becoming successful in highly competitive financial Markets.

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