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

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Natural Gas Markets Continue to Consolidate Above the 50 Day EMA
By: Christopher Lewis | August 9, 2022

• The natural gas markets have rallied a bit during the trading session on Tuesday to show signs of life, but we continue to see more noise than anything else.

Natural Gas Technical Analysis

Natural gas markets have been a bit positive during the trading session on Tuesday, but the gap just above that kicked off from the Monday open could offer resistance. If we do rally from here, it’s likely that we could see that gap get filled. The 50 Day EMA underneath is offering dynamic support, sitting right below the $7.50 level. That should offer a bit of support, but if we break down below there, I think that the natural gas markets probably drop down to the $7.00 level.

The seven dollars level being broken to the downside opens up a new wave of selling, perhaps opening up the possibility of a move down to the 200 Day EMA. Ultimately, this is a market that continues to see a lot of noisy behavior, but that’s typical as natural gas is highly dependent on the short-term weather report. As the United States has seen quite a bit of a heat wave, and that is starting to go away again, this should drive down demand, and even though there’s a lot of noise out there due to the European Union, the reality is that we will be focusing more on the US than anything else right now.

Rallies at this point in time end up offering selling opportunities at the first signs of exhaustion. Ultimately, the $9.00 level above is a large, round, psychologically important figure, and an area where we have seen a lot of selling pressure recently. In fact, I think we’ve essentially made a major “double top” in this market, and therefore it’s possible that long-term traders continue to short this market.

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