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Christopher Lewis
Natural Gas

Natural gas markets have rallied again during the trading session on Friday, breaking above the highs of the Thursday session. If we can break above the high from the trading session on Friday, the market is likely to go looking towards the $3.20 level, possibly towards the $3.40 level. At this point in time, the 50 day EMA underneath should offer plenty of support as well, as it is a longer-term technical indicator, and it has been very important since August.

NATGAS Video 16.11.20

Looking at this chart, this is a gap that has been filled, and now buyers have come back to push the market higher. This makes perfect sense because the colder weather is coming to the United States and Europe. This will continue to drive prices higher for the short term, as we are focusing on the winter months. However, once we get to about $3.40, we should see significant resistance. Above there, then we start to look at the $3.50 level as a potential resistance barrier, and then possibly the final leg higher before we start selling into the spring contracts. Nonetheless, the natural gas markets look very bullish at this point, and there is actually no reason to start shorting them.

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There is a huge “zone of support” between the 50 day EMA and the 200 day EMA underneath, as we have seen for several months. Ultimately, this is a market that will continue to see plenty of value hunters coming back into the market as natural gas tends to be heavy on the momentum of the latest weather reports coming out of the United States and of course the previous hurricanes in the Gulf of Mexico.

For a look at all of today’s economic events, check out our economic calendar.

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