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Christopher Lewis
Natural gas daily chart, August 14, 2019

The natural gas markets rallied quite nicely during the trading session on Tuesday, reaching towards the $2.20 level. This is an area that has been resistance recently, and I do think that the 50 day EMA which is pictured in red is drifting towards that same area as well. Ultimately, I think that rallies at this point should offer selling opportunities, based upon candlesticks that form nice long wicks. We are in the wrong time of year to expect natural gas markets to continue going higher from the longer-term standpoint, but we have course will have these occasional rallies as we are oversold.

NATGAS Video 14.08.19

Over the last several months, the 50 day EMA has been rather reliable, as we have pulled back from it every time we have reached towards it. Ultimately, the market looks very likely to try to continue the upward momentum but I’m willing to bet that we will roll over as there isn’t enough demand to take out the supply of natural gas. To the downside, the $2.00 level underneath is massive support, and a large, round, psychologically significant figure. Because of this, I think it makes a nice target, and I do believe that it’s only a matter time before we try to break down through it. If we do, then the market could reach down towards the $1.75 level, but at this point my base case scenario is that we just simply test the $2.00 level of the next couple of weeks. Sooner or later, probably closer to the month of November, then I believe the buyers may come in and push prices up.

Please let us know what you think in the comments below

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