The natural gas markets gapped higher at the open of the week, pulled back a bit, and then rocketed to the upside. It now looks as if we are breaking out of the consolidation area that we have been in for some time, and pullback should offer buying opportunities. I believe that the market could go to the $3.30 level above, and then eventually the $3.50 level after that. This market should continue to be noisy, but the seasonality of colder temperatures in the United States should continue to favor pricing and natural gas, at least in the next couple of months. This is typical, and happens every year. The question now is whether we can hang onto the gains. I think we can initially, but once we get closer to the springtime, we typically roll over and I think we will go back towards the $3 handle at that point. However, between now and then we should continue to see bullish pressure as we have seen a drawdown and inventory, and of course the demand will pick up as temperatures have gotten colder.
However, the natural gas markets are very quick to turn around, and notoriously volatile. I think that the $3.50 level will be the initial target going forward, but we do have a gap that extends as high as the $3.75 level from the end of last year. It looks like we won’t be a would get above there regardless. I think that any type of exhaustive candle towards the month of December should be a nice opportunity to start getting short again, but in the meantime, it certainly looks as if buying is the only thing you can do. I would recommend staying out of the futures market though, and perhaps use CFDs as they allow smaller position sizing.
NATGAS Video 13.11.17
This article was originally posted on FX Empire
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