FXEMPIRE
All
Ad
Advertisement
Advertisement
Christopher Lewis
Add to Bookmarks
Natural gas daily chart, February 12, 2016

Natural gas markets tried to rally during the trading session on Monday but found enough resistance at the $2.75 level to turn around and fall significantly. However, I think that we will eventually break out to the upside simply because we are so oversold. It’s not necessarily that I want to own natural gas, but I think that the relief rally is basically needed at this point, because we have been so sold off as of late. I think at this point it’s very likely that we will continue to see a bearish pressure on natural gas, but the bounce back makes quite a bit of sense, because the $2.50 level underneath is massive support.

If we were to break down below that level, it would be extraordinarily negative for this market. I don’t think that’s going to happen though, and I believe that it’s only a matter of time before we get some type of massive short covering rally. All it would take is a major cold snap in the right place in the world to drive demand through the roof in a very short amount of time. That being said, it would be short-lived, and as we are escaping the winter months in the United States, that will drive down a lot of demand. Beyond that, we have a lot of concerns about global demand, mainly because we have a potential slowing down of economic activity. That of course will drive down the need for energy consumption. I am bearish, but I would rather see a rally that I can sell from higher levels.

Advertisement
Know where Natural Gas is headed? Take advantage now with 

Trading Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary. A Product Disclosure Statement (PDS) can be obtained either from this website or on request from our offices and should be considered before entering into a transaction with us. Raw Spread accounts offer spreads from 0.0 pips with a commission charge of USD $3.50 per 100k traded. Standard account offer spreads from 1 pips with no additional commission charges. Spreads on CFD indices start at 0.4 points. The information on this site is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

Please let us know what you think in the comments below

Advertisement
Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker