Natural Gas Markets Pull Back From $5.00 During the Week

Natural gas markets have tried to break above the $5.00 level during the course of the week but gave up gains to show signs of hesitation. By pulling back the way the market has, it suggests that we are nowhere near being able to break out quite yet, and therefore you should pay close attention to the $5.00 level as a sign of whether or not we can have a serious move higher. You will notice that I have the Bollinger Band indicator on the chart and that we are trying to reach towards the 20 SMA.

NATGAS Video 14.03.22

If we break down below the bottom of the candlestick for the week, it is likely that we go looking towards the $4.08 level, where the 50 Week EMA sits. Keep in mind that there is a winter storm coming to the United States over the weekend, so part of the bullish pressure has been because of that. However, this is a market that will continue to look at the time of year as an impediment to rallies, as demand will certainly fall with warming temperatures. This is true not only in the United States but also in Europe for that matter.

I do believe that it will be very choppy, but that is not uncommon for natural gas markets. All things being equal, I think we have put the highs in for the winter, and unless something quite drastic happens. Because of this, the market is likely to see a lot of dangerous moves occasionally, but if you keep your position size reasonable you should be able to benefit from selling pressure.

For a look at all of today’s economic events, check out our economic calendar.