Natural Gas Markets Continue Quiet Movement

Natural gas markets have gone back and forth during the course of the trading session on Tuesday as we continue to hang around the base that the market has been forming. The market seems to be comfortable in this general vicinity, so would not surprise me at all to see this market just hang about. The area above offers a certain amount of resistance, so pay close attention to the 200 day EMA at the $4.08 level. If we can break above there, then we have a gap that could be filled.

NATGAS Video 26.01.22

Nonetheless, this is a market that I am looking to short at the first signs of exhaustion, simply because there is so much in the way of negativity longer term. Yes, there is a current cold snap in the United States, but it is not enough to change the overall longer-term fundamentals. At this point, the market is likely to continue seeing selling pressure every time we tried to rally, so therefore it is worth noting that the market is going to be paying close attention to the oversupply of natural gas in the United States from a longer-term standpoint.

The $3.50 level underneath is support, so if we were to break down below there it is likely that the market goes looking towards the $3.00 level. That is an area that has been important more than once and is a bit of a magnet for price longer term. Because of this, I think we will eventually revert to the mean, based upon the “measured move” of the descending triangle that we had formed previously at the most recent highs.

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