The Natural Gas futures contract has been on a bearish tear lately, dropping steadily from the $4.80 level down to the current area of $4.30. However, the commodity is now winding up for another potential breakout opportunity, which could spark the next big move. Here’s why..
Inside Value Relationship
The 15-minute chart shows price has maintained a bearish stance below the daily pivot range each of the last several trading sessions. Each pull-back to the range has been a selling opportunity within the current downtrend, which is exactly what you would expect.
Now, NG has formed a very narrow pivot range for today’s market, which happens to fall inside yesterday’s pivot range, thereby creating an Inside Value relationship. This relationship usually precedes a breakout opportunity.
Also, pivot range width was very narrow yesterday, and will be even more narrow today, which offers further evidence of a breakout ahead.
We must watch for confirmation out of the current two-day range: $4.40 up, and $4.25 down. A 15-minute close outside this range could do the trick.
Let’s see what happens!
Cheers!
Frank Ochoa
PivotBoss.com
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