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Christopher Lewis
Natural gas

Natural gas markets have pulled back during the trading session on Tuesday to reach down towards the 50 day EMA yet again. This is an indicator that seems to be like a magnet for price in this market, so of course it does make sense that we would find a way back down here. Ultimately, I think that we eventually go higher in the short term, due to the fact that there will be much more demand for natural gas as cold temperatures slam into the United States. That being said, I still do not know whether or not we can make a fresh, new high but clearly that would be the hope of bullish traders. It all comes down to weather and forecasts, especially around the New York, Boston, and Washington DC areas. Remember, natural gas tends to be a very localized market.

NATGAS Video 02.12.20

To the downside, I see the $2.60 level is essentially the short term “floor” in the market, but I still prefer buying dips regardless. I have no interest in shorting natural gas until we start trading spring contracts, so this is a one-way trade as far as I am concerned. Currently, we are trading the January 2021 contract and that of course does imply that there would be a certain amount of demand going forward. As long as that is going to be the case, I think we have to look at this as a market that still has a lot of upward possibilities, and need to ignore selling opportunities, lease for the time being. Ultimately, I am bearish in natural gas longer term but over the next month or two I will continue to favor the upside.

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