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MENAFN- Daily Forex)
The natural gas market gapped higher to kick off the trading week on Monday, rallied a bit, then gave back some of the gains to show signs of hesitation.
We are sitting just above the $3 level, and I think that is something worth paying attention to as $3 I believe will continue to be a major factor in where we end up going in one direction or the other. A break above the high of the day could open up a move to the 200-day EMA, which is currently right around the $3.30 level.
If we fall from here, the 50-day EMA at $2.90 could be the first target, but I actually think we probably drop all the way back down to the $2.60 level Demand and Seasonal Outlook
The heating and cooling demand spikes, generally speaking, offer a nice selling opportunity in natural gas because supply is not something we're worried about here in the United States. Even if we do rally from here, again, I'll be looking at the $3.30 level as a potential selling area as well.
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It's really not until we get into a serious heat wave that I'd be a buyer of natural gas and even then you're talking about a weeklong, maybe a 2 weeklong time frame. It's when we start talking about fall and the winter that I look into actually buying it for bigger moves. Until then, I'm a seller only. I don't buy these rallies, I fade them. So far today, it looks like that's what most of the market is doing as well.
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