Natural gas markets have been back and forth over the week but appear to be paying close attention to the 200-week EMA. The market is trading the February contract, which is the coldest part of the year, so demand is likely to pick up. That said, the market is likely to experience a lot of noise, but I believe buyers will eventually enter the market. After all, the Monday candle was a hammer and that obviously helps to the upside.
NATGAS video 28.12.20
I believe the $ 3.00 level above will be a significant resistance barrier, especially as it features a gap in the daily chart. This is an area that should continue to cause some sales pressure, but I think we need to go back out there to test that area again. In a few weeks we will start talking about the March contract, which will obviously be characterized by warmer temperatures, and therefore less demand. At this point, the market would then begin to sell off.
I believe we will see some rebound from here, just to see the market selloff for a long-term move. It really depends on the time frame you’re working with, but I think it’s just a matter of time before the sellers take over. I think we have a candle or two of strength from here just to look back and continue the long term negativity.
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