Natural gas markets have bounced significantly during the trading session on Tuesday, as we are getting close towards the 50 day EMA. At this point time, it looks like the market is trying to save itself. That being the case, if the market breaks above the $2.40 level that will confirm this bounce, and it could send this market looking towards the $2.60 level. To the downside, the $2.20 level should be supportive, and therefore I think it is likely that the traders will be paying close attention to this.
NATGAS Video 16.09.20
The market will be looking at the colder temperatures coming down the road, and therefore demand will more than likely pick up yet again. At this point in time, short-term pullbacks could be a buying opportunity but if we break above the $2.40 level, it would be smashing through the top of the inverted hammer from the Monday session. That is a very strong sign as well, so it is likely that we will continue to see momentum come back in. Natural gas is suggesting that perhaps it is going to be very choppy on the way back up, but quite frankly it does not make much in the way of a surprise, considering that the market itself is choppy and of course there is a huge amount of natural gas out there and it will take some work to get beyond all of this.
To the downside, there is a significant amount of support underneath at the 200 day EMA, closer to the $2.10 level, so that could be your short-term “floor in the market.”
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