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Christopher Lewis
Natural Gas

Natural gas markets initially rally during the trading session on Friday, reaching towards the 50 day EMA. The 50 day EMA of course is a technical signal the people pay attention to, and it is sitting just below the crucial $2.00 level. By failing to hang on to the gains like we did, we ended up forming a bit of a shooting star and the shooting star of course sits on top of the $1.80 level. In other words, there are lot of technical indications all over the place. At this point in time, I like the idea of fading short-term rallies, but I would not look to hang onto a bigger trade quite yet.

NATGAS Video 16.03.20

If the natural gas market broke above the $2.00 level, then I think it has a real shot at getting to the 2.20 dollars level. That is an area that has seen a lot of selling pressure, and also has the 200 day EMA just above there. At this point, I think fading rallies continues to be the way to go in this market as demand will be dropping due to warmer temperatures, and of course the slowing down due to the coronavirus. With that being the case, it’s very likely that demand will crater. However, you should also keep in mind that there will be bankruptcies in the United States oh we may get a sudden spike if the credit markets take them out. In the short term though, I still like fading rallies and I think that the $2.00 level will be very difficult to get above.

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