Tuesday’s trading session began with a slight decline in natural gas prices, but the market still appears uncertain about its long-term direction. The market will continue to be extremely volatile and risky, therefore it is difficult to see a scenario in which trading would be simple. In fact, natural gas is extremely hazardous for retail trading due to its reliance on weather forecasts. When the weather is favorable, the market is frequently favorable as well.
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The 50-Day Exponential Moving Average below provides support, while the $8.00 level above provides resistance, as we have seen in recent sessions. Ultimately, this chart reveals that we are situated in the heart of a large consolidation area, rendering this a “50-50 proposition.”
If we break below the 200-day exponential moving average, it is expected that the price will drop to $5.50. The $5.50 level marks the beginning of strong support at the bottom of the range, and if the market were to break over $8.00, it might go to the $10.00 level, which is the range’s upper boundary.
This winter is likely to be quite volatile for natural gas in general, so position sizing will be of the utmost importance as the market tries to figure out what to do with the EU situation, despite the fact that ConocoPhillips will supply Qatari gas to Germany in the future.