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

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Natural Gas Markets Continue Choppy Behavior
By: Christopher Lewis | August 10, 2022

• Natural gas markets have been somewhat choppy during the training session on Wednesday as we try to figure out where we are going next.

Natural Gas Technical Analysis

Natural gas markets have gone back and forth during trading on Wednesday as we are sitting above the 50 Day EMA. That being said, if we can break down below the 50 Day EMA, then we will clear the $7.50 level and go looking to the $7.00 level. That’s an area that has a lot of psychology and market memory tied to it, so I think it is probably only a matter of time before it would cause some noise. Breaking down below that level then opens up the possibility of going all the way down to the 200 Day EMA, something that I do think happens given enough time.

To the upside, we could have a certain amount of resistance in the form of the gap that sits just above. Breaking above that gap would be very bullish, opening up the possibility of retesting the $9.00 level again. If that were to be the case, I would anticipate quite a bit of selling pressure in the general vicinity, as it has been repudiated a couple of times already. I suspect more than anything else, we probably have a situation where traders will continue to “fade the rally.” I’m looking for signs of exhaustion that I can start selling again, as the heatwave in the United States is starting to go away.

Demand should drop, and therefore we should continue to see a lot of selling pressure. Ultimately, I think we have seen the highs of the year, and perhaps the highs for a long time to come. If we were to break above the recent highs, look out, natural gas could go parabolic yet again.

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