Natural Gas Markets Continue Parabolic Run

Natural Gas Technical Analysis

Natural gas markets have given up early gains during the day on Tuesday, forming a bit of a shooting star at the time I am writing this article. That being said, I would also point out that the RSI is extraordinarily overbought, and therefore we are probably due for some type of pullback. However, it is difficult to simply jump in and short this market, because quite frankly every time it looks like it is going to fall, it turned right back around.

The seasonality of natural gas is typically bearish this time of year, and a lot of this comes down to the nonsense going on in Ukraine. The European Union is supposedly going to look toward the United States LNG production for some type of alternate scenario, but the biggest problem that the EU has at the moment is that it does not have the capacity to “re-gasify” as much LNG as it needs. In fact, Germany is starting to talk about using coal again.

I am going to wait to see if I get some type of confirmation before shorting for a cyclical trade, something that I would be hanging onto for several months. As far as buying is concerned, it is a bit late for that. If you are already long natural gas, you may want to put your stop loss just below the $6.50 level to lock in a lot of profits. Chasing a trade all the way up here is a great way to lose money, although we have yet to pull back. When we do finally pull back, it is probably going to be rather volatile and violent.

Natural Gas Price Forecast Video 13.04.22

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