Christopher Lewis
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Natural Gas

Natural gas markets have rallied a bit during the Friday session as colder than usual temperatures have been seen in the United States. This is a short-term phenomenon though, so I think it is only a matter of time before we can start selling again. We have not formed the correct exhaustive candlestick to get involved though, but we are also seeing the bottom of the uptrend line that previously had been so important, so there could be a little bit of selling pressure in this area.

NATGAS Video 19.04.21

If we break down below the 50 day EMA, it could send this market much lower, perhaps reaching towards the 200 day EMA, maybe even the $2.50 level after that. If we did break above the top of the $2.70 level, then it is likely that the market could go looking towards the $2.85 level. Regardless, if we see signs of exhaustion, I am more than willing to jump on it as the temperatures in America will of course rise quite significantly. All things been equal, as long as that is the case then eventually the demand will drop and of course price will fall off the cliff.

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Nonetheless, keep in mind that natural gas markets are very volatile under the best conditions, so you should be cautious about your position size. Ultimately, the 200 week EMA would probably be a significant target, but I still think we probably even break down below there and go looking towards the $2.00 level, as it has been so important multiple times in the past. All things been equal, I have no interest in buying this market as it is still oversupplied.

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