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Christopher Lewis
Natural Gas

Natural gas markets have rallied a bit during the trading session on Friday, reaching towards the $2.70 level. That being the case, it looks as if the market is struggling with the 50 day EMA, so that could cause a little bit of structural resistance. Just above there, we have the $2.80 level, followed by the $3.00 level. Because of this, I think it is can be difficult to grind higher, but I do think that we have “one last move” left in the winter.

NATGAS Video 21.12.20

The 50 day EMA is only a psychological barrier more than anything else, because I do think that demand will pick up a little bit. Because of this I do expect that move, but I also think that there is a bigger move to be had a few short this market after a significant rally. After all, we are trading the January contract right now, but it is only a matter of time before we flip over to the spring contracts which of course will feature a lot less in the way of demand. The candlestick for the day is relatively positive, and you cannot ignore the fact that the last several candlesticks have seen hammers form, three out of the last four days.

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To the downside, the 200 day EMA sits at the $2.45 level so that is something worth paying attention to as well. I think we will probably make another move towards the $3.00 level, and somewhere above there we have a small gap that will probably cause selling pressure again. That is the play, a short-term buying opportunity, followed by longer-term selling opportunity.

For a look at all of today’s economic events, check out our economic calendar.

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