Natural Gas Markets Hang About 50 Day EMA

Natural gas markets have gone back and forth during trading on Tuesday as we are hovering around the 50 day EMA. By doing so, it looks like we are trying to stabilize a little bit and perhaps even turn around to fill the gap above. That being said, I think it is probably only a matter of time before we see sellers jumping back into the market in order to push this commodity down. After all, the natural gas markets are reacting to a storm recently, but really at the end of the day we have to worry about whether or not the demand will pick up. At this point, it does not seem very likely due to the fact that the warmer temperatures are coming to America in the next few weeks.

NATGAS Video 09.02.22

To the downside, the 200 day EMA sits at the $4.11, and if we can break down below there it is likely that we could go lower from there, perhaps reaching towards the $3.50 level. I do think that is eventually where we go, but it does not necessarily mean that we get there overnight. Short-term rallies will probably happen in order to try to fill that gap, but I think that is as bullish as this market gets. I think we not only reach towards the $3.50 level, but we could very well break down below there later this year. I continue to fade rallies, as natural gas has been overbought for some time, and of course demand is about to fall through the floor. Remember that this is basically a US contract, as United States does not export a significant amount of gas quite yet. (This is changing rapidly though.)

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