Natural gas markets have pulled back a bit during the trading session on Wednesday, as we had reached towards the 50 day EMA but then fell off. That is not a huge surprise though, considering that the market is likely to continue to see a lot of volatility, but considering that the market has shot straight up in the air recently suggests that the market is likely to continue going higher given enough time. After all, we have just ended up putting in a double bottom, so that is something to pay attention to.
NATGAS Video 02.07.20
Higher temperatures in the United States suggests that the demand for natural gas may pick up, and then of course we have the bankruptcy of Chesapeake Energy, which is one of the major fracking companies in the United States. They are heavily involved in the oil and natural gas, so that of course could have an influence on some type of supply issue, and that could be the beginning of a nice recovery.
Do not get me wrong, I am not looking for natural gas to suddenly explode straight up in the air, but I do think that we are forming a bit of a buying opportunity here, and that the $1.50 level should be massive support. With that being the case, the market is likely to see a lot of noise in general, so I like the idea of buying these dips for a move above the 50 day EMA, and then possibly to the $2.00 level.
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This article was originally posted on FX Empire
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