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Christopher Lewis
Natural gas daily chart, September 05, 2019

Natural gas markets have rallied a bit during the trading session again on Wednesday, testing the $2.40 level which I think is the beginning of significant resistance to the $2.50 level. I do expect this market to run out of steam right around here, so I have initiated short positions with a stop loss just above the $2.50 level. That obviously is a large, round, psychologically significant figure, and a break above that level would attract a lot of attention from market participants.

NATGAS Video 05.09.19

Beyond that, we also have the 200 day EMA closer to the $2.60 level, which is also a longer-term trader and algorithmic marker. You can also make an argument for the 50 day EMA turning upwards to signal certain systems as well. I think at this point, we are starting to build the base to turn things around but these are always messy affairs. The last thing you want to see is this market suddenly take off if you are bullish. You want to see a nice bottoming pattern, a bit of a grind back and forth, and then a surge higher. We have had a little bit of a grind, but quite frankly it hasn’t been enough for my liking. I would not be surprised at all to see this market reach towards the $2.25 level, if not the $2.20 level before finding substantial support. That being said, the $2.50 level above can’t be ignored if it gets broken.

Please let us know what you think in the comments below

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