[ad_1]
Natural Gas Technical Analysis
Natural gas markets have rallied initially after the market open and of course the news coming out of Israel hit the wires but have since fallen a bit showing signs of a little bit of hesitation. At this point, I am still very bullish of this market and will be employing a “buy on the dips” strategy to add to an already sizable existing position.
I don’t think that the overall analysis has changed much, and I think at this point in time it’s probably more likely than not going to be a scenario where you look at this through the prism of whether or not the winter is going to be cold enough to drive up demand. Certainly, the European Union is going to have major issues when it comes to natural gas supply this year, as the natural gas that only comes in from Russia will be gone for at least another season. Furthermore, the Nordstream being blown up doesn’t help the situation either.
The trans-African natural gas pipeline that was supposed to help the European Union is now in doubt, so really at this point the only thing that Europe can do is buy natural gas from Norway, which can only supply so much, and then of course from the Americans, meaning that they will have to ship Liquefied Natural Gas. LNG is very expensive, and not necessarily the most efficient way to transport energy. Because of this, Europe could be in for a lot of issues this winter.
With this, I fully anticipate the demand will continue to be a major factor in which direction we go, and now we have the $3.00 level underneath offering potential support as it was previous resistance. We also have the 50-Day EMA just below there as well, so that also is something worth paying attention to. Ultimately, this is a market that I think continues to see a lot of volatility and choppiness, but it certainly has a lot of upward pressure underneath it, which should continue to be a major factor. I have no interest in shorting natural gas, as the cyclical trade alone would be reason enough to get bullish.
For a look at all of today’s economic events, check out our economic calendar.
[ad_2]
Source link
