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Christopher Lewis
Natural gas daily chart, October 17, 2019

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.

NATGAS Video 17.10.19

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

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