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Christopher Lewis
Natural gas daily chart, December 26, 2018

The natural gas markets initially tried to rally during the day on Monday, but found the 50 day EMA as resistance. I think the market seeing the 50 day EMA roll over a bit suggests that we are going to continue to go lower. I think rallies at this point should offer selling opportunities as well. The $4.00 level above should be resistance, as it was previous support.

NATGAS Video 26.12.18

Natural gas markets continue to show signs of weakness due to a massive oversupply. This is a longer-term structural issue when it comes to natural gas, and therefore I think it’s going to be difficult for this market to rally for a significant amount of time. At this point, the $3.25 level is probably the target, and we are now starting to get away from the seasonality of bullish pressure. The winter has been a bit more mild than anticipated in the United States, so that of course has affected demand as well. Beyond that, natural gas demand could drop from an industrial standpoint as the global economy seems to be struggling to get going.

With this, I suspect that we are going to continue to go lower. If we break down below the $3.47 level, then I think we will go towards the $3.25 level. Between now and then, I suspect that short-term rallies that show signs of exhaustion will be excellent selling opportunities that most prudent traders will be taken advantage of.

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