Natural gas markets have rallied significantly during the course of the week to reach towards the $2.68 level, which is an area where we have seen resistance previously. Nonetheless, this is a very bullish candlestick so we could see a little bit more of a rally in the short term, but I do think that given enough time we will see plenty of sellers jumping into this market so that we can push this market to the downside.
NATGAS Video 19.04.21
Keep in mind that there is a massive oversupply of natural gas in general, and that will continue to work against the value of crude oil but given enough time I think that the market will set up an opportunity to start shorting. At this point, the $2.00 level underneath would be a longer-term target, an area where we have seen a massive move to the upside. All things being equal, this is a market that is that you sell for several months, as the temperatures start to climb throughout the year. All things being equal, this is a market that continues to see massive volatility, because the market itself is relatively thin.
At this point in time, I have no interest in buying this market until we get past October, so it is simply a matter of trying to find an opportunity to start shorting. Quite frankly, the higher we go, the more interested I am in doing this. The last couple of weeks have been a little cooler than usual in the United States, but it is certainly the wrong time of year to expect a huge surge in demand to be anything more than temporary.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire