Natural gas markets have initially fallen during the trading week but has turned around to show signs of life again. It now looks as if the $4.75 region is significant support, as it looks like we are continuing to see a lot of volatility and buying pressure in that area. It makes sense, this is the January contract which of course is a cold weather month, meaning that the markets will start to price in the idea of even more demand. That being said, we have been in an uptrend for a while, so it looks like we probably are getting ready to continue.
NATGAS Video 29.11.21
However, keep in mind that the market is likely to see a lot of noisy behavior and of course a lot of risk once you get closer to the $6.00 level. The market has the specter of spring coming soon, so I think we may have one more last pop to the upside coming, and then at that point in time we could see a little bit of a pullback. In general, this is a market that continues to see a lot of noise, but in the short term I think it is a “buy on the dips” scenario, unless of course we close below the $4.75 level.
The candlestick of course is very bullish looking, and of course the inverted hammer from the previous week being broken to the upside could bring in fresh buyers, but again, I think that it is very possible that the $6.50 level above might be the highs for this season. That has been a very impressive move, but I also recognize that the breakdown might be just as impressive.
Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.