- The natural gas market has dropped a bit in the early hours here on Friday as we are hanging around in a range and waiting to see if we break down to a larger gap. That is very possible, but I also recognize that at this point in time.
- we are getting fairly late in the season, and we are getting close to a major trend line. So, if we do break down from here, there is a gap that is right around the $2.73 level or so.
Several Things Below to Watch
And if we get down there, there’s a couple of different reasons, the gap, the trend line, and of course, the contract rolling over next week for this market to turn around and go higher because, frankly, November is a much cooler month. And that makes quite a bit of sense that we would see natural gas demand at least projected to rise. If we rally from here, the $3 level is like a magnet for price. The 50 day EMA at the $3.07 level is resistance. And then we have the 200 day EMA at $3.23. If we can break the 200 day EMA at that point, then I think we will start the price in winter. We start to really drive prices higher from a more trend standpoint.
One More Push Lower?
I think ultimately, you’ve got a situation where the market might have one more push lower. But I think we’re right about at the end of the negativity. On next Friday, when we switch over to November, I wouldn’t be surprised at all to see a bit of a gap in order to start the next contract at a higher price as demand should pick up, one would assume, if history is any indication.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
