Natural Gas Markets Go Parabolic

Natural gas markets have been parabolic during the trading session on Wednesday to reach towards the $4.63 level. That being said, this is going to end up being a nice selling opportunity due to the fact that we are getting close to the bottom of the triangle, and quite frankly this type of move is begging to be sold this time year. Yes, cold weather coming to the United States is going to continue to drive up a bit of demand, but at the end of the day it is still a situation where we will continue to see oversupply.

NATGAS Video 13.01.22

The United States is starting to export large amounts of LNG to other parts of the world, and that might be part of what we are seeing here as well. Nonetheless, at the first signs of exhaustion I will not hesitate to short this market because quite frankly we are already trading the February contract, meaning that sooner or later the warm temperature comes back into play. Looking at this chart, I do believe that somewhere around the $4.75 level we are going to hit a significant amount of resistance.

At that point in time, if we see anything that shows signs of exhaustion like a shooting star, I more than willing to jump in into this market to the short side and aim for at least the $4.10 level, if not the implied “measured move” of the massive triangle above that was supposed to be a move towards the $3.00 level. That of course is a large, round, psychologically significant number that would attract a lot of attention.

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