Natural gas continues to see a lot of noisy trading, as we are trying to enter the “bullish season.”
Natural Gas
The natural gas market gapped lower to kick off the trading session here on Friday but has turned around since then to show signs of life. With that being the case, it suggests that the market is going to remain very noisy, but it also looks like the 200-day EMA is going to continue to be a little bit supportive as well.
Right now, it looks like the market is happy to consolidate between the 200-day EMA and $3.30. The $3.30 level is an area that has been significant resistance a couple of times recently, and therefore I look at that as the major barrier. If the market were to break back toward that area, breaking that level opens up the possibility of a move to the $3.40 level.
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To the downside, the $3 level would be a major floor
To the downside, the $3 level would be a major floor, but really at this point, we're starting to roll over into the time of year where demand picks up. We're not quite there yet, but the nights in northeastern United States cities are starting to get cooler. The days are still fairly warm. You can still walk around with a T-shirt, so it's not horrible at this point, but you certainly have the shift coming.
Therefore, I like buying dips in this market. I don't have any interest in trying to short this market anytime soon, and we are approaching that 3 months or so out of the year that I become bullish as a general stance. So I'll look for dips as buying opportunities, just as we've seen today. Continue to take advantage of that.
A break above the $3.40 level could really get this contract moving, but we're getting ready to roll over in a couple of weeks into December. That could be the catalyst. We'll just have to wait and see.
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