Natural Gas Technical Analysis
The natural gas market initially did try to rally a bit during the early hours on Tuesday, but it looks like we are still struggling overall with the movement of natural gas to the upside. After all, we’ve seen a lot of problems when it comes to the sustainability of rallies. And that does make a certain amount of sense at this point in the year, because quite frankly, we have a situation where temperatures in the United States are climbing, and they aren’t going back to the wintertime anytime soon. And even if they did, it would be a one or two day storm.
Sooner or later, the supply that was taken out of the system will be replenished. And as that’s the case, I think it’s only a matter of time before you see natural gas plunge. This is a cyclical trade that I deal with every year and try to take advantage of as the demand for natural gas drops.
The 50 day EMA sits just below near the $3.85 level. And I think that’s something that we probably need to pay attention to. But if we were to break down below there, then I think you’ll see even more selling pressure. To the upside, if we can take out the $4.25 level, that means we’ve got another bounce left in us.
But if you’ve been following me here lately, I’ve said more than once that, typically this time of year, I get one or two stop outs and then get a big gain. And that’s the game I’m playing right now. I stopped out once. So now the question is, are we late enough into the spring to start seeing natural gas fall apart? I think we’re going there.
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