Natural gas markets have been very quiet during the trading session on Thursday, as the Thanksgiving holiday would have been more important to most people. Ultimately, this is a market that is going to fluctuate with the weather, but it is worth noting that we have recently broken above what could potentially be a descending wedge. It is a little early to suggest that we have broken out and will continue to go higher, but it is obvious to me that we are likely to continue seeing a bit of noisy behavior as we are just below the 50 day EMA.
NATGAS Video 26.11.21
If we do break above the 50 day EMA, it is likely that we will continue to go looking towards $5.50 level, which is an area that has a lot of noise around it. Furthermore, it also has a certain amount of psychology attached to it, so I think at this point in time it does make a certain amount of sense that we would see a bit of profit-taking if we get there.
On the downside, if we can break down below the $4.80 level, then I think it is very likely that we continue to struggle, perhaps breaking down towards the $4.50 level. Temperatures of course have a major influence on where we go next, but keep in mind that we are starting from such a high level that we may be due for a major pull back. One thing is for sure, keep your position size relatively small, natural gas has a nasty habit of ripping in both directions.
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This article was originally posted on FX Empire
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