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

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Natural Gas Markets Rally Again
By: Christopher Lewis | August 11, 2022

• Natural gas markets have rallied during the Thursday session, breaking as high as $8.55 before pulling back just a bit.

Natural Gas Technical Analysis

Natural gas markets have rallied a bit during the trading session on Thursday to break above the $8.50 level but have already given back quite a bit of the gain. This suggests to me that we are eventually going to break down a bit, and perhaps continue going lower. That doesn’t mean that it will be easy to short this market, and quite frankly this is the second most volatile market that I know of off the top of my head. In other words, you need to be very cautious with your position sizing.

If we break back down to a negative candlestick for the day, essentially breaking down below the $8.18 level, then I think the natural gas markets will continue to drift lower, perhaps trying to go down to the 50 Day EMA. If we break down below that level, then it’s likely that we go even lower, perhaps down to the $7.00 level.

On the upside, the $9.00 level continues to be looked at as a major resistance barrier and has repelled buyers a couple of times. If we were to break over all that, obviously would be very bullish. However, I don’t think it’s going to be easy to get above there, so that being said, it’s very likely that we will continue to see people willing to fade this market in that general vicinity.

At this point, the $9.50 level looks to be a massive “double top” from a longer-term perspective. Yes, it looks a little bit like a bullish flag right now, but at the same time you can draw bullish flags in plenty of double tops going through the past. In other words, it’s not a bullish flag until it is confirmed, which it is not.

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