Natural gas markets have gone back and forth during the trading session on Wednesday, as we wait to see whether or not there is going to be some type of demand out there. Ultimately, the gap underneath needs to be filled for longer-term traders to feel comfortable buying, and it will make a bit of sense if we simply drift lower in order to make that happen. The $3.00 level underneath is a large, round, psychologically significant figure, and therefore I think a lot of interest will be found in trying to buy natural gas in that area, and then perhaps even below down at the $2.80 level. Ultimately, this is a market that I think continues to be very noisy but positive to say the least as the temperatures drop in the United States.
NATGAS Video 29.10.20
Looking at the chart, at least from the longer-term standpoint, natural gas could go as high as $3.50 in the next couple of weeks, but at this point your essentially chasing the trade which is not a good way to go. With that in mind, I like the idea of buying dips and value as it occurs. Gaps do eventually get filled in the futures market most of the time, and most traders know that so it is difficult to come up with a scenario where you would be wise to simply jump in with both feet. All things being equal, I think that we have a general drift lower though we will be taken advantage of. If we shoot straight up in the air, we could go as high as $4.00, but that is obviously a much less stable move.
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This article was originally posted on FX Empire