Natural Gas Attempting a Break from Balance

For eight straight trading days, March natural gas has been contained within a 2665-to-2896 rotational balance range. On Friday, February 20, 2015, the market gapped open higher, above the 2896 eight-day balance high. Although Friday had a relatively tight rotational range, the gap remains and the market settled above the eight-day balance range. When a market trades outside a defined balance range, the two most likely scenarios are:

  1. Gain acceptance outside the balance range and accelerate.
  2. Trade outside the balance range, get rejected, and then begin a rotation to the opposite end of the balance range.

Continued Upside Breakout

If the market gains acceptance above the eight-day balance, the large 3299-to-3442 gap becomes the possible destination. A visual bar chart reference is at 3178.

Upside Breakout Failure

If the market fills the 2866-to-2912 gap below and gains acceptance back below the 2896 eight-day balance high, then a rotation back down to the 2665 balance low is the most likely scenario.


Trading and investment carry a high level of risk, and CQG, Inc. does not make any recommendations for buying or selling any financial instruments. We offer educational information on ways to use our sophisticated CQG trading tools, but it is up to our customers and other readers to make their own trading and investment decisions or to consult with a registered investment advisor. The opinions expressed here are solely those of the author and do not reflect the opinions of CQG, Inc. or its affiliates.