Natural Gas explodes to the upside on Tuesday

Natural gas markets have exploded to the upside during the trading session on Tuesday, breaking above the top of the up-trending channel, and showing signs of life yet again. I think that the market will ultimately reach towards the $2.90 level, and then eventually the $3.00 level which I see as the overall “ceiling” in the market. There will certainly be a lot of psychological importance attached to that number, so I anticipate it’s only a matter of time before the sellers would return. However, in the short term it’s very likely that these pullbacks should offer nice opportunity to go long of a market that obviously has a lot of momentum, and I believe that the $2.80 level now has become a bit of a “floor.”

Ultimately, I think that these markets will eventually find sellers based upon the longer-term fundamentals, but right now it’s obvious that people are focusing on the hot weather that has come to the northeastern part of the United States, as well as issues when it comes to supply of natural gas in the European Union. I think that given enough time we should see more normalization this market, but quite frankly the natural gas market tends to attract a lot of scalping, which means people don’t pay attention to anything more than about a week out from where we are. Because of this, pay attention to momentum and simply follow it. However, keep in mind that the $3.00 level course is a massive level to pay attention to the longer-term.

NATGAS Video 23.05.18