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Natural gas markets rallied significantly during the trading session on Monday, breaking above the $2.80 level with strong momentum and more importantly, volume. We are likely to start turning around as we were getting ready to switch over to winter months in the futures market, so therefore we start to look at colder temperatures and therefore higher demand in the United States. I believe that the $2.75 level should offer major support going forward, and essentially a “floor” as we have seen it as such previously. Ultimately, that level offered a significant support down to the $2.70 level.
Ultimately, I believe that we will see the occasional pullback but that should offer a buying opportunity as we have seen a bit of a change in the overall attitude. That being the case, I think we could go as high as the $2.95 level, which extends to the $3.00 level. If we were to break above there, that would be a monumental change, but ultimately I don’t think it happens anytime soon. Even if we do break above there for a short amount of time, it could be like last year that simply offers an even bigger selling opportunity. That of course won’t happen until January if history is any indicator, so I am a seller then, but between now and then I think that I am a buyer of short-term pullback to show the slightest hint of support. Natural gas markets are of course very volatile by their nature so keep your position size small.
NATGAS Video 18.09.18
This article was originally posted on FX Empire