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Christopher Lewis
Natural gas daily chart, November 18, 2019

Natural gas markets initially gapped lower just slightly to kick off the Friday session, pulled back towards the $2.60 level, and then turned around to show signs of positive pressure. At this point, the market looks as if it is consolidating, perhaps with an eye on the 200 day EMA just below. This is a market that is going to be driven by weather, and weather in the United States is starting to get colder, so that of course is going to drive a significant amount of demand into the natural gas markets. With that being the case, the market is likely to continue to find buyers on dips and as the 50 day EMA is starting to cross into the 200 day EMA, we could get even more bullish pressure.

NATGAS Video 18.11.19

There is a gap below that has not been filled though, and that’s the one thing structurally that concerns me. That gap is closer to the $2.40 level, but if we can break through the gap above the $2.75 level, it’s very likely that the market will continue to go much higher. All things being equal, the market looks as if it is trying to turn around for the winter pop, and with that it should continue to be one that is bought on short-term pullbacks. All things being equal, natural gas does tend to be very bullish this time year, so it comes down to a cyclical and seasonal trade. As a general rule, I go long on the natural gas at this time of the year.

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