Natural gas markets fell during the trading session on Tuesday, breaking below the $2.40 level. That being the case, we have reached towards the $2.30 level which of course makes quite a bit of sense. This market tends to move and $0.10 increments and is in a downtrend. We had recently been worried about the tropical storm hitting the Gulf of Mexico and disrupting the free movement of the commodity. That being the case, the market looks very likely to continue to “recover” the bearishness as the storm has subsided.
NATGAS Video 17.07.19
Beyond that, we also have the hot temperatures in the United States looking to drive up demand for natural gas to cool homes. However, that’s also a short-term move, so I think at this point rallies are still to be faded. Yesterday I suggest that a move below the $2.40 level could open up this move, as the 50 day EMA has been slicing for several candles. It now looks as if it’s ready to resume resistance as a moving average, so at this point I look at it as a guide. Having said that, I’ll recognize a move below the $2.30 level as a selling opportunity as well.
It’s not until we get cooler temperatures on a consistent basis that I think the natural gas markets will recover any significant amount of time. I continue to look at these rallies as selling opportunities and seeing no scenario in which that changes before we start trading colder month contracts in the northern hemisphere.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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