Natural Gas Markets Bounce After the Initial Plunge

Natural gas markets initially fell during trading on Monday but have turned around to show signs of life again as the market has bounced. That being said, the natural gas markets are still going to be very volatile, right along with other commodities. If we were to break down below the 50 Day EMA, that could open up fresh selling and send this market looking towards the 200 Day EMA.

NATGAS Video 15.03.22

The natural gas markets have initially reacted very positively to the idea of more demand coming out of the European Union, but quite frankly we are getting so close to the warmer seasons in the northern hemisphere, the upside is probably somewhat limited. That being said, I think the $5.00 level above has a significant amount of importance attached to it, and as a result, we may retest that area. If we get back up there, I think the sellers will get involved and start to short drastically.

If we break down below the 50 Day EMA, then it is likely that we will kick off a bit of a flush lower, which I am expecting to see sooner or later. A breakdown below the 200 Day EMA opens up the possibility of a move towards the $3.50 level, which is my longer-term target given enough time. The market will continue to be very noisy, so you should probably be cautious with your position sizing, only adding once the market moves in your favor. Ultimately, this is a market that I do think falls, but it is a matter of picking the right time to start shorting. While there are concerns about inflation, I do not believe that natural gas will be one of the vehicles that people run to.

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