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Christopher Lewis
Natural gas daily chart, September 13, 2019

The natural gas markets initially fell a bit during the trading session on Thursday, but as you can see have turned around to show signs of strength at the $2.50 level. At this point, it’s very likely that the 200 day EMA above will continue to cause major issues, and therefore it would not surprise me at all to see this market pull back a bit. If we can break above the shooting star from the Tuesday session, it is a very bullish sign and we should continue to go higher. However, I think it’s a bit early to get excited about natural gas due to the cyclical nature of demand.

NATGAS Video 13.09.19

In the short term, I would anticipate a bit of a pullback that could offer value and would be very interested in buying natural gas closer to the 50 day EMA which is pictured in red on the chart. Ultimately, I’m looking for value for the shot higher that could continue due to the winter demand in the United States and Europe. We have gotten a little bit of a boost due to the hotter than usual temperatures, but longer-term we are going to need winter demand to deplete the massive amount of supply sitting in tanks.

Longer-term, we will certainly sell off but there’s always a nice pop this time a year that you can take advantage of as this market is so heavily depended on whether. Ultimately, it gives you a couple of months of strength, followed by a massive shot lower which of course gives us an opportunity to trade it in both directions. Right now though, we need to see some type of value in order to start buying, but if we do break out above the shooting star, then I will be forced to jump into this market as momentum will certainly be on its side.

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