Sellers Return to Natural Gas Markets

Natural gas markets have initially tried to rally during the trading session on Monday but gave back gains as we approached the $5.00 level. This of course is a large, round, psychologically significant figure that a lot of people would pay attention to, and therefore it is not a huge surprise to see that there has been a bit of a reaction. Because of this, I do believe that the $5.00 level will continue to be a major barrier that is difficult to overcome, and therefore I like the idea of shorting in this general vicinity.

NATGAS Video 22.03.22

Natural gas has to fight the fact that there are warmer temperatures coming, despite all of the noise coming out of Europe. Earlier in the session, there have been headlines coming out of the European Union that countries like Germany can survive the rest of the year without Russian gas, so that of course puts a little bit of downward pressure on the market as it at least removes one of the big narratives. Regardless, we have seen a lot of fights in this market so I think the consolidation and choppiness will continue to be one of the major problems but given enough time I also believe that the market will sort itself out.

The 50 Day EMA sits just below the $4.50 level, and of course, that is a psychological “midcentury level” that a lot of people will be paying attention to. Because of this, I think it makes a lot of sense that we try to get down there based upon price action, and that is a simple reality that we are in a larger range at the moment.

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