- The natural gas markets rallied a little bit during the trading session on Wednesday here, but it appears that the market is just simply hanging around and trying to sort out whether or not we can maintain momentum above the $2.50 level.
- After all natural gas markets have been bouncing around during the trading range of the last couple of weeks based mainly upon winter storms in the United States.
Now that we are getting close to the end of the overall winter season, you have to ask questions as to whether or not demand is going to pick up anytime soon. If it does, it'll more likely than not just be one particular storm, it won't necessarily be a big deal. In other words, I think we are running out of time for the natural gas bulls out there. Ultimately, I think natural gas settles into a range that a lot of people will be paying close attention to over the next several months. In the next couple of weeks, I suspect that we will set that range and just simply abide by it for the next several trading months, perhaps all the way into fall.
To the Downside…
Underneath we have the $2 level offering support and above we have the $3.33 level offering resistance. I also believe that the $3 level will be resistant as well. As we're hanging around $2.50, we're close to fair value. It's also worth noting that we are trying to fill a gap from the beginning of the week so now that we're filling it that could bring in more selling pressure.
Either way, I do think there is a selling opportunity here signs of exhaustion. The 20 day EMA is starting to cross below the 50 day EMA closer to the $2.73 level. So, I think that also is an area where you may look for some type of long wick to the upside. Keep in mind, you have to be cognizant of the latest weather reports in places like Boston, New York, DC, Montreal, Quebec to get an idea as to how this market will move with that, I think it's very difficult for retail traders, but I should say that we are settling into this range and that's probably the best way to play this market.
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