Natural gas markets have initially fallen during the trading session on Thursday only to turn around and test the previous uptrend line that we have seen act so importantly during the last several months. That being the case, the market also has the 200 day EMA just above causing resistance as well, so I think at this juncture we should see plenty of selling pressure. The first signs of exhaustion will be sold into for what I can see, and even above the 200 day EMA we have a significant amount of resistance in the form of the 50 day EMA.
NATGAS Video 09.04.21
Keep in mind that the demand for natural gas will continue to drop rather significantly, as the temperatures rise in the northern hemisphere. This is a cyclical trade, and one that I take every year. I simply wait for signs of exhaustion on rallies to take advantage of shorting opportunities. The $2.40 level underneath would be the first target, followed by the $2.25 level. All things been equal, this is a market that I think will eventually find reasons or breakdown, if for no other reason than the massive difference between supply and demand.
Even if we did break out to the upside, I would simply sit on the sidelines and wait for yet another opportunity to sell. This is a market that has no business rallying anytime soon, so I will take advantage of any time it gets a little bit ahead of itself. At this point time, the market is likely to continue seeing a plenty of opportunities in very choppy trading.
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