The natural gas markets have initially tried to rally during the trading session on Monday but gave back gains yet again. At this point time, we are simply drifting sideways in general, as we try to figure out where the momentum is coming for the next move. That being said, the market is likely to see that the 200 day EMA above continues offer plenty of resistance and quite frankly I am more than willing to start shorting in that general vicinity if we get anywhere near there. It currently sits at the $4.10 level and is starting to drift a bit lower in general.
Underneath, the $3.50 level will have a certain amount of psychological and structural importance built into it, if we can break down below there then I believe that the overall downtrend continues, and we dropped significantly. The triangle above that we broke out of has a “measured move” for a drop down to the $3.00 level. I do believe that we get there eventually, especially as we are starting to absorb the idea of a warmer than anticipated winter in the United States, and then beyond that warmer temperatures are certainly coming.
With this being the case, market is likely to continue to see a lot of selling of anything close to looking like a rally at this point in time. While we did at one point have serious concerns about supply, those are obviously in the back mere now that the US has completely recovered from the flooding and the hurricane that happened during the previous year.
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This article was originally posted on FX Empire