Natural gas markets rallied a bit in Wednesday’s trading session to hit the $ 2.60 level. This is an area that was the top of the gap from a few weeks ago, and it is now closed. Nonetheless, I think we could continue to move a little higher to find resistance near the 50 day EMA. At this point, I think any opportunity to bypass this market on the basis of exhaustion, you should grab it.
NATGAS video 03.25.21
As spring approaches, demand for natural gas will begin to drop, mainly due to warmer temperatures in the northern hemisphere which are lowering demand. After all, this is an oversupplied market and we are simply bouncing off an area that is relatively strong support. Having said that, I think this is just an opportunity to take a step back and miss this market again. I think the natural gas markets will continue to offer a lot of selling opportunities, but more than likely it will be something you will have to wait to get involved.
Longer term, I think the market is heading towards the $ 2.00 level, maybe even the $ 1.80 level after that. Nonetheless, I know that I have no interest in trying to buy this market as the fundamentals work against it in the longer term. Ultimately we will continue to see a lot of volatility, but I still think this is essentially a “one way trade”.
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This item was originally posted on FX Empire