Natural Gas Markets Continue to Show Hesitation
Natural gas markets initially shot higher during the course of the trading session on Thursday but continue to find resistance just above the below the $5.00 level. The $5.00 level of course is an area that has a lot of psychology attached to it, so I think it makes sense that there are barriers there. That being said, it is more important to keep in mind that the weather plays a much bigger part in this market, and it is a sensitivity to the weather in the northeastern part of the United States that will determine where we go next.
NATGAS Video 04.03.22
Yes, I understand that there are concerns when it comes to Russian gas going into the European Union, but the reality is that the United States will not be providing much relief anytime soon as we are still trying to build out the exporting infrastructure.
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Looking at the chart, you can see that the $4.50 level is an area of congestion, so I do think that is probably where we go looking towards. If we break down below there, then it is likely we go looking towards the $4.34 level. A breakdown below that level then opens up the possibility of going down to the 200 Day EMA near the $4.15 level. Natural gas is going to continue to see sellers on every rally, especially as we start heading towards spring in the United States. Temperatures are warming up, and therefore demand for natural gas should continue to drop. Ultimately, this is a market that I still prefer to sell short-term rallies that show signs of exhaustion.
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