Christopher Lewis
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Natural Gas

Natural gas markets have gapped higher during the trading session on Monday to show signs of strength, but quite frankly it looks like a simple bounce. This is a market that I think continues to see a lot of volatility, but at the end of the day it should be noted that we are heading towards the warmer part of the year, thereby driving down the value of natural gas in general, due to the fact that there will be less demand. That being said, the market has plenty of resistance in the form of the 50 day EMA above, so I think that might be a nice area to start shorting again if you get the opportunity.

NATGAS Video 26.01.21

The $2.80 level above is a massive resistance barrier, but at the end of the day it is likely that could end up even being the “ceiling” in the market. To the downside, the 200 day EMA does offer a little bit of support, but I think we go much lower than that. In fact, I believe it is only a matter of time before we reach towards the $2.00 level, perhaps even lower. I like the idea of fading short-term rallies at this point, due to the fact that the warmer temperatures coming should be toxic for price, and therefore I have no interest in buying this market at all this time of year. Any short-term bounce should be thought of as an opportunity to short yet again. The oversupply of natural gas will continue to be a major problem.

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