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Christopher Lewis
Natural gas weekly chart, October 14, 2019

The natural gas markets are currently trading the November front month contract, which of course normally means more demand as the temperatures plunged in the United States and the European Union. All things being equal, this is a market that should continue to find buyers underneath, and therefore eventually once we get cold weather forecasts, the market should take off to the upside rather stringently. However, it’s difficult to simply throw money into the market and hope. The brake above a hammer from the previous week to me is the buying opportunity for longer-term traders. At that point, then we should see a drive towards the 50 week EMA, and then eventually the $2.70 level which should be resistance as well.

NATGAS Video 14.10.19

Going forward, I fully believe that this market will rally significantly into the winter as it typically does, but this is a short-term trade. This is not something that you should hang onto for a long amount of time, perhaps two months. This is one of my favorite trades of the year, but timing the entry is always a bit difficult. All things being equal, I don’t have any interest in selling because quite frankly it would take some type of catastrophic collapse in the market to break down below the $2.00 level. I anticipate that this market will be very noisy, but eventually get some clarity that will have buyers jumping in drastically. Keep your position size small and add as it works out in your favor.

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