Natural Gas Markets Continue to Plunge

Natural gas markets have fallen again during the trading session on Thursday as we are below the $4.00 level again. All things been equal, this is a market that should continue to go much lower, reaching towards the $3.50 level. That being said, we are a little bit oversold, and therefore I would not be surprised at all to see a little bit of a bounce. That bounce is something that I will not hesitate to sell into, as we are clearly very negative at the moment. After all, the temperatures are going to be rising in the United States, which of course is going to be detrimental to demand.

NATGAS Video 11.02.22

When you look at this chart, you can see that the $3.50 level is an area that is significant support that we have seen for a while. Furthermore, the descending triangle that I have marked on the chart did measure for a move to $3.50, and therefore I think we have to go down there to retest that area. If we break down below there, then it is likely that we go looking towards the $3.00 level.

I believe at this point, it is only a matter of time before any rally get sold into, as it is very likely that we will continue to see any storm that comes into the picture only cause a little bit of a bump from a short-term trading type of perspective. Natural gas is abundant in the United States and will continue to be.

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