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Christopher Lewis
Natural gas daily chart, September 04, 2019

Natural gas markets rallied a bit during the trading session on Tuesday, after initially pulling back to the 50 day EMA. The 50 day EMA of course offered enough momentum to turn things around and now that we are above it we finally have some type of positive action in this market. With all of that being said, this is a market that still continues to have a lot of concerns out there so it’s very likely that the volatility will only get worse.

NATGAS Video 04.09.19

One thing that is obvious on this chart is that we have broken through a downtrend line and the 50 day EMA so that of course is a very bullish sign. That being said, I think it is a little bit early to expect the explosion to the upside for the winter, but it most certainly is coming. I believe that part of the bullish pressure that we have seen over the last week or so has to do with the hurricane, and whether or not it’s going to be disruptive for the natural gas markets as so much of the supply and refining is done in the southern part of the United States.

To the downside, the market is very likely to find plenty support near the $2.20 level, and then perhaps down to the $2.10 level. At this point, it’s very likely that the market will continue to find buyers underneath but I think that we are trying to establish some type of range bound market between now and the turn around. If we break above the top of the candle stick for the trading session on Tuesday, then the market could go to the $2.50 level where I see even more resistance. I believe we are in the beginning of a consolidation phase, which will be followed by a bullish run.

Please let us know what you think in the comments below

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