Natural Gas Today 23/9: Continues To See Buyers (Video)

(MENAFN- Daily Forex)

• Natural gas exploded to the upside during the trading session on Friday, as we are slamming into the $2.75 level.
• At this point in time though, we do have to pay attention to the technical analysis, which of course comes into play sooner or later.
• It's worth noting that the relative strength index is just now starting to cross over into the overbought condition.

Now that doesn't necessarily mean that natural gas needs to be shorted anytime soon, nor does it mean that we are going to roll over, but it does suggest that perhaps we're a little out ahead of our skis at this point. If we do break above the $2.75 level, then I think the $3 level will be the target.

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As you know, I have been a buyer of natural gas for several months now, but I've been doing so with a very steady diet of ETF positions, not trying to get over levered in a market that is so drastically volatile. This market is trying to price in the idea of colder temperatures in fall and of course winter. And as a result, I think it makes perfect sense that cyclical trade comes into the picture as it does every year Pullbacks Be Buying Opportunities?

Short-term pullbacks at this point in time, of course, will be a buying opportunity. And I think at this point in time, the $2.50 level will end up being a bit of a floor in the market. This is further backed up by the idea of the 200-day EMA sitting just below. And therefore, I think at this juncture, you have to look at this as a very bullish market, but perhaps one that needs to pull back in order to offer value.

Keep in mind that this market is very noisy quite often, and because of this – the most important thing you can do is keep your position size reasonable, as volatility can be very dangerous. However, it's also worth noting that this market does tend to move quite a bit father then you would expect, sometimes bringing in more profit than anticipated.

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