EliteTrader101

Natural Gas Reversal and liquidity grab

Largo
NYMEX:NGF2015   Henry Hub Natural Gas Futures (Jan 2015)
It looks like the large institutions got the liquidity they were looking for as they rejected the break and reversed back into value. Prices quickly gaped up as other traders saw the rejection and were willing to pay up as they know that prices are going to head higher. The target is the breakout into fair value and if prices hold this level, prices are going higher into the top edge. Stop is below the lows.

A lot of the traders who bought at the top and were holding had their stops placed at the bottom edge, and as prices went below to stop these longs who had to sell, they provided liquidity to the institutions who had to buy to cover their shorts and to go long on the reversal back up.
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