Natural gas markets continue to go back and forth in general as we are in theory looking at a bit of a bullish flag right now, with the $1.90 level being the top. That being the case, I do think that this market goes higher eventually. I think at this point what we are seeing is some type of bullish flag being formed, and therefore if we can break above the $1.90 level I think we are at the very least going to go looking towards the $2.00 level, possibly even the $2.10 level on that breakout as the bullish flag measures for that move.
NATGAS Video 10.07.20
Conversely, if we were to break down below the 50 day EMA, then the market is probably going to go down to the $1.70 level, possibly even the $1.50 level on a serious breakdown. The $1.50 level is a major bottom in the market, and one that we have seen holding several times over the last several years. With the hotter temperatures in the United States I do expect that we will continue to see a “buy on the dips mentality”, but I do not know if we can break significantly above the $2.10 level.
I do believe that the 50 day EMA should offer a bit of support, so keep that in mind as well. We did pull back a bit during the session on Thursday, but at the end of the day I think we still have plenty of buyers underneath. I do not necessarily think that the market is going to collapse again.
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