The natural gas markets have rallied again during the trading session on Wednesday, breaking above the 50 day EMA slightly to show signs of bullish pressure. However, the $2.40 level continues to be crucial as it has been an area where both buyers and sellers have push the market around time and time again.
Natural gas markets rallied a bit during the trading session on Wednesday, reaching towards the $2.40 level which has recently been resistance but when you look at longer-term, it’s been an area where both buyers and sellers have been pushing this market back and forth. The 50 day EMA is also in the neighborhood so it makes sense that a little bit of a “pushback” has happened. That being said, I do like natural gas if we can break above the $2.42 level, as it should open the door towards the $2.60 level.
The alternate scenario of course is that the candlestick it’s broken to the downside, which could open up the door for more consolidation between the $2.20 level on the bottom and the $2.40 level on the top. I expect a lot of back-and-forth choppy behavior, and therefore could be more base building going forward. That being said, I don’t expect the market to continue going lower for a significant amount of time this time of year. The question now is whether or not we are building a base, or if we are just simply winding back and forth in order to build up significant amount of momentum. Remember, markets need inertia to be built up in order to make a bigger move. A break above the $2.40 level also kicks off a “W pattern” that measures for a move towards the $2.60 level.
Please let us know what you think in the comments below
Chris is a proprietary trader with more than 20 years of experience across various markets, including currencies, indices and commodities. As a senior analyst at FXEmpire since the website’s early days, he offers readers advanced market perspectives to navigate today’s financial landscape with confidence.