Natural gas markets initially rally during the week, reaching towards the $2.50 level before selling off again. There is a bit of a gap on the daily chart down near the $2.35 level, and it’s likely that the market will continue to pay attention to that area as it has been very crucial. There is an uptrend line that we are testing right now but the candlestick shape doesn’t exactly inspire confidence. If we were to break above the $2.50 level, the market is likely to go looking towards the top of the wipeout candle from the previous week. Keep in mind that that previous week sold off most of the negativity during the Friday session, which of course would have been very thin as it was the day after Thanksgiving.
NATGAS Video 09.12.19
If we broke down below the uptrend line, the market is likely to go looking towards the $2.25 level, then possibly the $2.00 level after that. Ultimately, this is a market that continues to see a lot of volatility and choppiness, and as a result it’s going to be difficult to hang onto but every winter, we eventually get some type of massive cold snap where the natural gas markets spite. Natural gas drillers in the United States drilled the 17% more natural gas this past year than they did last year. At this point, it’s going to be difficult to break through the supply, but it seems as if it’s only a matter of time before it gets cold enough to through that supply, albeit for the short term move that we normally get in December or January.
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This article was originally posted on FX Empire
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