Gas markets have pulled back from the highs, showing signs of exhaustion yet again. The market had bounced significantly from the 50 day EMA, but now it looks as if the market got far ahead of itself, and therefore it makes a certain amount of sense that we would see a bit of hesitation. Gravity eventually comes back, and therefore the market needs to pullback in order to find value and the ability for buyers to pick it back up. Quite frankly, the temperatures are going to get colder rather soon, so it does make sense that natural gas would continue to see a lot of bullish pressure.
NATGAS Video 27.10.21
At this point, I believe that the $5.50 level will more than likely be supportive, just as the 50 day EMA will. With that being the case, think it is only a matter of time before we pick it back up and therefore, I would be looking for signs of value to take advantage of. Looking at this chart, you can clearly not short this market, and demand should only pick up from here.
With that being the case, I look at pullbacks as opportunities to get long yet again, as the bull market is far from ending. With that being the case, I like the idea of picking up this market every time it dips, and I do believe that we will revisit the $6.50 level given enough time. To the downside, if we were to break down below the hammer from last week, which could send this market much lower, but that does not look likely to happen in the short term.
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This article was originally posted on FX Empire