During Thursday’s trading session, natural gas markets initially attempted to advance, but rapidly surrendered those gains. At this time, the market appears to be attempting to steadily grind higher, but there is a great deal of resistance above that may pose significant issues.
As a result, it is highly likely that we will continue to observe disruptive conduct; hence, I am not viewing this through the lens of a major change. Even though the Freeport LNG terminal is still unable to supply gas to Europe, I believe you have a situation where there is a certain level of demand due to the fact that temperatures are beginning to fall in the United States.
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The 200-day exponential moving average (EMA) is located near the $6.65 price level, and the 50-day EMA has broken below it in the same region. Breaking above that focuses attention on testing the “island reversal” that occurred approximately two weeks ago. Breaking above the $7.21 mark could pave the way for a larger upward surge.
Nonetheless, it is evident that the market continues to be extremely volatile, and the fact that we were unable to continue going higher indicates that any move to the upside would be met with significant opposition. If we are able to remove the hammer from Wednesday’s session, there is the potential for a decline to the $5.50 level, and potentially even the $5.00 level. Expect volatility and maintain a moderate portfolio size.
