Theme remains bullish but are longs buying risk here

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The theme remains bullish for "natty" as we rally off of support after identifying bullish absorption. We can see 3 months of ACCUMLATION here so it difficult to estimate an upside target but we can identify some anticipated levels of resistance at $8.00, $8.30 & $8.80 as well as "gaps" created during the "markdown."

We saw a decrease in cumulative selling following buy our first increase in buying demand since March 2016. Again this looks bullish .

Despite this great "rally" the ease at which prices continue to trade higher is contracting while volume remains pretty constant so I speculate we are seeing some profit taking here. We will like return to $7.00 and shake out weak bulls while assessing how much supply remains available to control before we sustain any more gains.

The volume profile (purple area on the right) defines "value" and is showing that prices are entering a "low volume area." This could allow prices to test the $8.00 level then we can appreciate that prices are trading above "value" and likely encounter shorts and long liquidation. This process of test and retest will continue allowing rotation of the "point of control high" allowing balance to be maintained among buyer and sellers.

MY OPINION: New longs are chasing and entering a trade exposed to downside risk. I would wait for an entry confirming support.

Good Luck!
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