Natural gas markets initially tried to rally during the trading session on Friday but found enough resistance at the $2.30 level to rollover and break down towards the $2.25 level. By doing so, the market looks likely to continue to struggle, as we have a major amount of oversupply in this market. That being the case, I believe that all you can do is sell rallies at this point, as we have plenty of reasons to think that we continue to fall. The oversupply of course is a major issue, but beyond that we also have the market structure that of course has been very poor to say the least.
NATGAS Video 22.07.19
We ended up forming a bit of a shooting star after the attempted break out during the trading session on Thursday, and that shows just how little interest there is in buying this market. I think that the $2.20 level will be targeted, and then eventually we will go to fresh, new lows. The 50 day EMA continues to offer resistance, and as a result this market cannot be taken seriously as far as a rally is concerned until we break above there on a daily close at the very least. This market continues to be hounded by supply issues, and the lack of damage that the tropical storm has caused in the Gulf of Mexico. The heatwave of course is a minor blip on the radar, but it is short-lived at best. Buying natural gas is extraordinarily dangerous at this point.
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This article was originally posted on FX Empire
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