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Christopher Lewis
Natural gas daily chart, October 28, 2019

Natural gas markets gapped higher to kick off the week but has since pulled back towards the 50-day EMA. At this point, the market is likely to continue to find a lot of buyers, as the $2.40 level underneath should be supported. That is a large, round, psychologically significant figure, and with the 50-day EMA being in that same area, it should show quite a bit of buying pressure. The 200-day EMA is above at the $2.54 level, so at this point there could be a significant amount of resistance at the area. If we can break above there, then we will go much higher, towards the $2.60 level.

NATGAS Video 28.10.19

Natural gas markets show a lot of resiliency at the moment, and the fact that weather forecasts in the United States are starting to turn to lower temperatures, it’s likely that the market will continue to rise based upon perceived future demand. This is a short-term phenomenon that happens every year, extending all the way until we get into the second week of January or so. This gives you the ability to buy for a longer-term move, and then add to your position every time it dips. Building a larger “core position” that you can take advantage of the seasonal attitude of this market makes a lot of sense. This is something that I’ve done several years in a row, with strong success. Having said that though, we need to see a bit of resiliency to start adding.

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