Christopher Lewis
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Natural gas daily chart, November 05, 2019

Natural gas markets have gapped higher to kick off the week, as we continue to see a lot of bullish pressure due to the cyclicality of the market, and the fact that colder temperatures are coming to the United States. With that being the case, the market is very likely to continue going higher, and therefore I like the idea of buying pullbacks. In fact, this cyclical trade quite often runs until mid-January, so this could go quite a bit further if the temperatures in the United States continue to fall.

NATGAS Video 05.11.19

Short-term pullbacks will probably find plenty of support at the gap, but even if we did break down below there it’s likely that the 200 day EMA at the $2.55 level will offer support as well. Below there, the 50 day EMA is at the $2.44 level, and that should of course offer support. However, it looks as if the 50 day EMA is ready to break above the 200 day EMA, forming a “golden cross.” At this point, the market looks as if it has bottom for the year, and as demand picks up in the United States, it should continue to drive this market much higher. I don’t have any interest in trying to short natural gas, as it should continue to be heavily in demand going for the next couple of months. At this point, it looks as if we are probably going to go looking towards the $3.00 level, which is of course a large, round, psychologically significant number, and then possibly the $3.25 level which is also technically important.

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