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Natural Gas on the Nymex bounced last week, closing 16% higher than the previous one at $3.66. EIA reported a bearish nonetheless build for this time of year of 107 Bcf in working underground stocks for the week ended April 25. Total inventory is currently at 2,041 Bcf, 17.6% lower y/y but 0.2% above the 5-year average.

We wanted to see this bounce coming from the recent lower lows after we had heavily sold this market on its seasonal downtrend. The Daily MACD crossed bullish on April 29th, offering another breather on our directional trading. At this point we must identify the seasonal floor. We are talking about a level at $2.50. The market moved a little higher than the previous seasonal ceiling this last winter. We believe that profiteering has been the only reason, as we do not see any fundamental changes in supply, demand, or transportation. We do not want to become too greedy about selling the same rallies again from here, so, from now on, we need to proceed with caution before meeting the next breakout in uptrend. We do not expect this to happen before the July Dog Days of the Lower 48. The Daily chart has to cross bearish before we start selling again the near-term charts.

It is becoming increasingly sad to hear from official sources, most recently the US Secretary of Energy, that the burden of electrification will fall back on fossil fuels or coal. The example that the US should follow is not that of Russia. That is, a country that failed to diversify its economy away from fossil fuels in time. The oil companies themselves, in the US and in many oil and gas producing countries around the world, are the ones gradually embracing new forms of energy. There is no reason for the US to be fearful of the energy transition. In any case, national security issues are not just about the energy mix but also about price. After Putin's invasion, it became clear who were the industries and the trading offices blackmailing consumers. The US economy has only to gain from renewables, in which it is already a world leader. US macro data and the Dollar Index have to be monitored routinely. Daily, 4hour, 15min MACD and RSI are pointing to entry areas.

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