Natural Gas Markets Testing 50 Day EMA

Natural gas markets have stabilized a bit during the trading session on Wednesday as we approached the 50 Day EMA. That being said, the market is not necessarily one that looks strong, rather it looks like it is due for a little bit of an oversold bounce. Because of this, I will be waiting for an opportunity to short this market after a bounce, understanding that we are in a time of year where demand typically drops.

NATGAS Video 10.03.22

If we were to simply fall below the 50 Day EMA, then I believe that the market will probably go looking towards the 200 Day EMA below, which currently sits at the $4.18 level. With this in mind, I do think that the market is more likely than not going to go looking below there as well, as we are starting to see warmer temperatures enter the fray in the United States. With this being the case, the market is going to continue to be very noisy, but I think it is a bearish market.

On the upside, the $5.00 level looks to be rather resistive to me, so I do not think we break above there anytime soon. If we did, obviously would be a very bullish turn of events but I am not holding my breath on that one. It would take some type of massive supply shock or cold snap to suddenly appear in the United States to make that happen in my estimation.

All things been equal, I would anticipate seeing a lot of volatility in this market but that is nothing new. Natural gas markets are a bit thin and trade on the latest weather report, making them a perfect example of volatility in motion.

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