a technical analysis of natural gas

As the market continues to break through the neckline of the previous head and shoulders, natural gas markets have moved slightly lower during Thursday's trading session. Because there are now so many moving parts when it comes to natural gas, the market is likely to continue experiencing high levels of volatility. The situation in Europe has not improved, but on the other hand, there is not much the Americans can do to assist. If that remains the case, I believe you should proceed with caution when attempting to purchase this market.

I don't think it will be painful, but if we break down below the $7.40 mark, we might see a larger flush below. At this point, at least in the near term, I believe you are still seeing this through the lens of "selling the rally." Although it may be a goal given that the 200-Day EMA is increasing and is now at the $6.83 level, I do not necessarily believe that it will be simple to reach.

Given this, I believe you are presented with a scenario where you must recognize that volatility is a very real concern, and as a result, you must exercise caution when sizing your positions. Because this market is unpredictable even in the best of conditions, sizing positions in it may be extremely challenging. A little amount of resistance should also be provided by the 50-Day EMA above.