Natural gas markets have initially tried to rally during the trading session on Friday but gave back the gains in order to form a less than ideal candlestick. That being the case, the market looks as if it is struggling to bet and it is also likely that we may get a little bit of follow-through. Nonetheless, I am not a seller here because I see plenty of buying opportunities underneath and I think that we are starting to see a significant amount of support in general. The 20 day EMA has just crossed above the 50 day EMA, a bullish sign indeed. Regardless though, I am not looking for a bigger move, rather I am looking for a continuation of the overall range.
NATGAS Video 03.08.20
The range is between the $1.50 level, and the $2.00 level. As long as we do not break out of this range, I think a simple back-and-forth type of trading strategy might work, but I prefer buying the dips as we have seen so much in the way of resiliency. Furthermore, we have a lot of bankruptcies in this sector that will continue to drive down the overall supply, just as the extreme heat in the United States has increased the demand. Overall, I think this market continues to grind back and forth until we get colder temperatures, and then at that point we may finally see a bit of a breakout to the upside. The reason I say this is that the $1.50 level has been crucial for support going back years. A breakdown below that level would be an extraordinary sight to behold.
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This article was originally posted on FX Empire
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