Natural gas markets have fallen a bit during the trading session on Wednesday, reaching into that thicket zone of support that extends from the $2.20 level to the $2.00 level. That being said, the market is likely to see a lot of back and forth, but I do think that it is only a matter of time before we get a bit of a bounce. Temperatures have not been cooperating with natural gas markets during the winter, and we are already halfway through January. The fact that the Americans had drilled 17% more during 2019 than 2018 also adds more in the way of headwinds for market pricing.
NATGAS Video 16.01.20
Looking at this chart, I believe that we are going to continue to bang around in this $0.20 area, but if we can break above the shooting star from the previous session, the market probably goes looking towards the 50 day EMA, perhaps even the $2.40 level. All things being equal, natural gas markets are a disaster and we are even starting to see some companies out there worry about bankruptcy. I think that will be the story and 2020, there will be a significant amount of bankruptcies when it comes to companies in this sector, but given enough time it’s likely that the market will eventually see a spike this winter, but that is something that you should be selling into, on signs of exhaustion. If the market were to break down below the $2.00 level, it would be an absolute disaster for the commodity at that point.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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