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Christopher Lewis
Natural gas daily chart, August 30, 2019

Natural gas markets rallied a bit during the trading session on Thursday, breaking above the downtrend line and breaking above the top of the shooting star from the previous session. At this point, it’s very likely that we could see another attempt higher, but I suspect that the rally is somewhat limited despite the downtrend line being broken. Ultimately, the 50 day EMA being broken is a positive sign, but we still have some work to do. Beyond that, if we turn around and break below the $2.25 level it will negate that move and then break this market down further.

NATGAS Video 30.08.19

We are not trading a cold month right now, although October is certainly much more likely to be cold than September, but at the end of the day we probably have a pullback or two ahead of us to wait until we start buying again. The $2.00 level underneath is massive support, as it is a large, round, psychologically significant figure. I think that the market may try to get back down there but I also believe that it’s becoming more obvious now that the level will be very difficult to break through. Ultimately, I think that we have probably seen the bottom of the natural gas markets for the year, but it’s likely that the $2.50 level will offer a bit of resistance. Once we break above there then we will see the market really start to take off to the upside.

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