Natural gas markets are winding up in this general vicinity, trying to build up a certain amount of inertia as the inventory numbers do well. Ultimately, if we can break above the $2.40 level the market is likely to go looking towards the 200 day EMA which is closer to the $2.55 level. Overall, that is the trade that I'm looking for. Pullbacks at this point could see support at the $2.20 level and breaking down below that level would be very negative. At this point though, it of course looks as if we are trying to find some type of bottom and reach higher based upon winter, as temperatures in the United States are starting to drop.
NATGAS Video 18.10.19
At this point in time, the market is going to continue to be very noisy, but with the wintertime coming it will certainly take off to the upside eventually. The $2.40 level is the initial barrier, the 200 day EMA is the next barrier, followed by the $2.70 level. I believe that we break it given enough time as well, but obviously that would be a significant move. It will take some time to get there, but I do think that it's only a matter of time before the right weather forecasts comes out to send natural gas much higher. This could lead to a roughly 2 ½ month jump, and then the breakdown when we start trading Spring contracts. Right now it's a simple matter of scaling into a position slowly.
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This article was originally posted on FX Empire