Natural gas markets have rallied initially during the trading session on Friday but found resistance on the $2.85 level. By showing quite a bit of negativity in that area, it looks as if we are still waiting to find the momentum to go higher. All things being equal, the $2.60 level underneath is going to continue to be supportive, just as the 50 day EMA reaching towards it should be relatively supportive as well. All things being equal, I do think that the market continues to go higher, perhaps reaching towards the $3.00 level.
NATGAS Video 19.10.20
Recently, we have seen a significant amount of volatility in the natural gas markets due to the fact that the hurricane blew through the Gulf of Mexico this week, and we have seen more than one of those out of late. Furthermore, the market is also taking a look at the idea of colder temperatures coming to the northern hemisphere, which leads to a cyclical trade anyway. We are trading the November contract, so it does make sense that the market should rise overall.
At this point, the market continues to be very noisy, but I think it offers more of a “buy on the dips” type of situation. I do not have any interest in shorting natural gas, at least not this time of year. At this point, it is simply a matter of looking for value and taken advantage of it every time the market offers it. If we can break above the $3.00 level on a daily close, then it is likely that we go looking towards the $3.25 level above.
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