Oil & Gas - Energy - Commodities - Resources (OILBRENT)

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Natural Gas Markets Continue to Threaten the 50 Day EMA
By: Christopher Lewis | August 8, 2022

• The natural gas markets have gapped lower to kick off futures trading on Monday, as it looks like we are going to threaten the 50 Day EMA again.

Natural Gas Technical Analysis

Natural gas markets have been negative over the last couple of days, and Monday was no different. As futures markets open on Monday, we started to see a lot of negativity, with a gap lower kicking off the week. Natural gas continues to be very volatile, but that should not be a huge surprise considering that out of all of the markets that trade with reasonable volume, it ranks second to only bitcoin in its volatility profile. In other words, you need to be very cautious with this market under the best of circumstances.

Heatwaves in the United States caused quite a bit of noise, but now we are starting to get a little bit away from that, and therefore demand should start to drop. If that is in fact going to be the case, then it’s very likely that we have a scenario where natural gas continues to go much lower. If we break down below the 50 Day EMA, the next target will be the $7.00 level. Breaking below that level opens the possibility of a move down to the 200 Day EMA, something that I’m not necessarily expecting to see, but do recognize could happen.

With that being the case, I’m more cognizant of rallies that show signs of exhaustion as opportunities going forward. Quite frankly, the price of natural gas has gotten a bit out of hand, and now that the Germans are not to be able to buy US natural gas, at least not enough to fix their problem, that premium starts to work itself out of this market.

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