Natural Gas Technical Analysis
Natural gas markets rallied during the trading session on Thursday to reach the $8.00 level. The $8.00 level offers a certain amount of psychological resistance, and therefore it makes quite a bit of sense that we have selling pressure there. Ultimately, this is a market that has recently seen a horrific candlestick, and it suggests that there is even more downward pressure.
Any sign of exhaustion will more than likely be jumped upon at this point good because the Freeport terminal cannot produce LNG for Europe anymore. That being said, the market has a lot to pay attention to as we continue to see volatility in all assets, not just natural gas.
The Russian natural gas situation and the Nordstream 1 pipeline having issues continue to put a little bit of bullish pressure in this market at the same time, so I think this is simply going to be an exercise in volatility. However, that massive candlestick from Tuesday should be kept in the back of your mind, as those candlesticks almost never happen in a vacuum.
If there is going to be significant selling pressure, we will almost certainly take out the $7.00 level. Breaking down below there opens up the possibility of a move to the $6.00 level, just above where the 200 Day EMA currently sits.
All things being equal, I don’t know that this is a downtrend waiting to happen, but clearly, we are overdone in this market so I think it is probably only a matter of time before we get another vicious correction. I would not want to put a lot of money into this market in either direction at this point, it would be very cautious about position sizing under all circumstances.
Natural Gas Price Forecast Video 17.06.22
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