- Natural gas markets have exploded to the upside, reaching towards the $2.00 level.
- Due to this the uptrend of the natural gas market is short-lived.
- The natural gas market do not continue to try to rally with a lot of work to do ahead of itself.
- Whether or not to change the market trend might be a bigger question.
- In the interim it looks like we are buying the dips in order to make a move in general.
A recently published article in FXEMPIRE, written by Christopher Lewis deals with the poor run of natural gas market and how it forsees a revival of prices under pressure.
Natrual gas markets – a short lived uptrend
Natural gas markets, have kept away from trailing quite significantly during the trading session on Wednesday as the WTI Crude Oil markets have disintegrated.
Quite often, these markets will move in opposite directions due to a “spread trade” that has been quite popular for some time.
Traders will sell natural gas, while buying WTI Crude Oil. If the WTI Crude Oil market gets hit hard, that will quite often cause a lot of short covering over here. It leads to the collecting of profits to cushion the blow and the other market. That is essentially what I believe has happened during the trading session on Wednesday.
The 200 day EMA is currently trading around the $2.10 level. It is an area that has offered resistance. It is because of this that I believe the uptrend is probably somewhat short-lived from here.
Pullbacks should offer plenty of buying opportunities underneath though, especially near the $1.85 level which is a 50 day EMA location.
Ultimately, this natural gas market seems not to continue to try to rally. But has a lot of work to do ahead of itself. We have made several “higher lows”, although it is not necessarily a sign that we are going to explode to the upside.
Mounting pressure
It certainly shows that we are building far too much in the way of buying pressure to completely ignore it. Whether or not we can change the trend might be a bigger question. But clearly in the interim it looks like we are buying the dips in order to make a move in general. At this point, expect a lot of volatility more than anything else.
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Source: FXEMPIRE
