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      Watch Out Natural Gas Holders

      avatar
      SpyderCall wrote a column · Sep 7, 2022 01:03
      NGmain Henry Hub Natural Gas Future Main(OCT2)
      7.997
      -0.148
      -1.82%
      Delayed
      Sep 6, 2022 19:37 ET
      Technical Outlook
      Natural gas Futures completely tanked on Tuesday dropping around 10%. The technical picture is looking grim as it appears that natural gas is rejecting its previous highs. There is also was a major divergence between the price of Nat. Gas Futures and both MACD and RSI on the weekly candles. That is a bearish indication. This probably added to the downward momentum of todays sell-off. You can see the divergence in the charts directly below.
      Watch Out Natural Gas Holders
      Watch Out Natural Gas Holders
      I also wanted to point out in the chart below that price of natural gas closed on Tuesday just above the 20-day moving average. For all you Bollinger band traders this is the mid Bollinger band. if the price dips below this then it would make the charts look even more bearish.
      Watch Out Natural Gas Holders
      So basically this downtrend looks like it is confirmed after Tuesday’s big sell-off. So now the only thing to do is look for potential support zones where we might see some buyers stepping in. The next closest zone of demand to watch is around the 7.50-7.45 area. The next area of interest to watch after that is around the seven dollar price point +/- 10 cents. These are the two areas to where you should watch for potential friction on the way down or a possible bounce point. Ive highlighted these Areas of interest in the chart below.
      Macro Outlook
      The initial rally and natural gas was mainly due to the energy crisis in Europe caused by the supply chain issues resulting from the Russian war in Ukraine. These energy supply chain issues are slowly solving themselves naturally. There is even talks of the Germany and will have its natural gas storage situation solved before winter. Also supplies of natural gas are increasing in the US while the forecasted demand for the gas is decreasing. These are bearish macro aspects.
      And also just today there was headlines about the EU potentially drafting a lot of legislation towards this energy crisis situation. Basically the EU was going to throw a lot of money into trying to solve this energy crisis. The news came out today and could possibly have provided some downside momentum onto todays sell-off. This could very well be rumors but this news made a lot of sense to me after seeing the big sell-off.
      Most People are feeling bullish because of all of the headlines about the Nordstream natural gas pipeline being shut down. This doesn’t seem to be bringing natural gas prices back up. And if the trend is down then we must follow the trend.
      The rally in natural gas may very well continue. It is possible that natural gas could reach new highs. But right now the trend is down at least for the short term. So If you are a long-term holder of natural gas or natural gas related equities then you might want to cover your long position. And if you are a short term trader then there might be a good opportunity to build a short position in some natural gas related equities. Here are a few tickers to look out for.
      Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only. Read more
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