During Tuesday’s trading session, natural gas markets have declined slightly as we continue to hug a trendline that I have marked on the chart. As the 200-Day Exponential Moving Average (EMA) sits just above and provides some resistance, the market is likely to continue to exhibit a great deal of erratic activity. The 50-Day EMA is beginning to approach the 200-Day EMA, and if we break below it, it will initiate the so-called “death cross” that many investors closely monitor.
Nevertheless, a rise to $7.00 seems possible if we break above these moving averages. After that, it is feasible that we may reach $7.50, and as a result, I believe that rallies will likely wane at the first symptoms of tiredness. Ultimately, I do believe we have a scenario in which we are likely to break below the uptrend line and decline to the $6.00 level. If the price falls below the $6.00 level, it is probable that it will reach the $5.50 level.
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Keep in mind that natural gas is adjusting to the possibility that the Freeport LNG terminal will remain closed for longer than previously anticipated. This means that there would be no large exports to the European Union, which was one of the reasons why everyone was so excited. At this time, I believe that we are seeing more downward pressure than anything else, so I think that the market will continue to decline. Nevertheless, even under the best of conditions, this market is quite volatile.