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Christopher Lewis
Natural gas daily chart, November 01, 2019

Natural gas markets have rallied initially during the trading session on Thursday only to turn things back around and show signs of exhaustion. At this point, it’s very likely that the market will pull back a bit, but at this point I believe that buying dips continues to be the best way forward. There is a massive gap near the $2.50 level which I consider to be the “floor” in the market. The 200 day EMA is just above and has offered resistance, so it’s not a huge surprise to see that we have struggled at this point. However, this is simply a technical issue, and now that we are starting to show signs of colder temperatures in the United States, it makes quite a bit of sense that the demand for natural gas will start to increase.

NATGAS Video 01.11.19

With that being said, we are a bit overextended so I’m looking for short-term pullbacks to take advantage of value in a market that has quite a bit of time to go to the upside. However, the market was to turn around a break above the top of the shooting star like candle, that could send you to fresh, new highs given enough time. It would be a severe break of resistance, not only due to the structural move of the day, but the fact that it is near the $2.75 level, which has been massive resistance several times in the past.

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