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Christopher Lewis
Natural gas daily chart, June 05, 2019

Natural gas markets went back and forth during trading on Tuesday as we are well below a previous major support level. By breaking below the $2.50 level we had seen a lot of negativity jump into the marketplace and send sellers into overdrive. That being said, the $2.50 level should now be resistance as it has been important in the past. Not only has it been important recently but has been important long term. It’s a large, round, midcentury number, so it makes sense that a lot of attention will be paid to it.

NATGAS Video 05.06.19

To the downside, I believe that the $2.25 level will be targeted, but we may get a bit of a pop between here and there. By rallying towards the $2.50 level I think that there will be a lot of people who had been playing that level for support willing to jump out of the market and close their long positions. That of course puts negative pressure on the market. Beyond that, this is the wrong time of year to expect a lot of bullish pressure in the natural gas markets, because there simply is no demand for heating. There are a lot of concerns about global growth out there, which of course has an effect on the demand for natural gas. Granted, later this year when we start reaching towards the colder months, natural gas will get a bid but in the meantime every time we rally, I’m looking for an excuse to start selling.

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