Natural gas markets have gone back and forth during the trading session on Friday and shown the resistance to offer support yet again. That market move is indicative of the colder temperatures hitting the United States and therefore driving of demand. The gap has basically been filled, so there may be a little bit of downward motion, but there should be buyers underneath. At this point, the market should then go looking towards the $3.00 level above, and then perhaps beyond there. The 200 day EMA is also below that offer support, just as the 50 day EMA is ready to turn around and break above that level.
NATGAS Video 11.11.19
Based upon the consolidation area, the market should be looking for a move towards the $3.50 level based upon the $0.75 range that we had just broken through. Colder temperatures should continue to push this market higher until about 10 January as per the cycle. At that point traders will start to pay attention to spring contracts going forward, and therefore warmer temperatures meaning less demand. Remember, natural gas markets are highly oversupplied from a natural standpoint, but there is a significant drawdown of supply during the winter months in the northern hemisphere. Ultimately, I have noticed in shorting this market, and therefore buying dips continues to work in the short term, but if you are a longer-term traders simply buying and holding should work. Expected a bit of resistance at the $3.00 level but ultimately it gets broken and we continue higher.
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This article was originally posted on FX Empire
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