Natural Gas Forecast Today 23/07: Recovers On Monday (Chart)
Date
7/23/2024 11:22:53 PM
(MENAFN- Daily Forex)
I recognize that we have bounced quite significantly from a crucial support level underneath. Spot natural gas continues to look at the $2.00 level as a major barrier, and we have rallied quite a bit since we got closer to that region. By doing so, it does suggest that the market is more likely than not going to try to jump into some type of recovery phase, but also, it's worth noting that this time of year is typically somewhat tougher natural gas, so I think we just got oversold.
Technical Analysis
The technical analysis for this market is rather bullish, and at this point I think it's worth noting that the $2.00 level is not only previous support and resistance, but it is also an area that has a lot of psychology attached to it. Because of this, it's not overly surprising to see this market bounce from there. That being said, I don't necessarily think that we are going to start a huge new bullish market at the moment, but we should be paying attention to the 50-Day EMA above, which is closer to the $2.42 level, and is dropping. I think we can break above there, then it's obvious that the natural gas market could pick up a little bit of momentum.
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There is a lot of heat in the western part of the United States right now, so demand for natural gas probably will pick up, but at the end of the day it's probably also worth noting that we are typically very soft this time of year, and I think we are in a situation where traders will continue to look at this through the prism of building up a bigger position for the fall. After all, when natural gas really starts to take off is when the heat demands, and the United States start increasing. Right now, we are nowhere near there, but as we get deeper into the year as far as futures markets are concerned, it then makes the idea of buying natural gas much more sensible. In other words, I think you can buy on the dip, but I would not do so with a huge position.
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