Natural Gas Forecast: $3 Resistance Keeps Prices Range-Bound

Natural Gas Technical Analysis

The natural gas market has been rising a bit during the trading session here on Wednesday as we continue to trade in a fairly well-defined range, with the $3 level above being immediate resistance and a bit of a ceiling for the market. It is also a psychologically important barrier, so pay attention to that as well.

The next area of importance would be the $3.10 level. That is an area that features a 200-day EMA. To the downside, we have the 50-day EMA at $2.88, followed by $2.80 in support. This area has been well-defined as of late, so I use these levels as a guide.

The Seasonal Trade and LNG Exports

Keep in mind, this is what they call shoulder season in natural gas markets, when it is not really overly hot, so demand for air conditioning drops, and it is not really overly cold, so heating season is not here yet.

We are getting close to rolling over yet again on the 28th into the November contract. We will start to see people think more about winter at that point in time.

Liquefied natural gas exports out of the United States could be significant this year, as the Europeans suddenly find themselves without reliable energy. The Qataris have been buying some LNG from the United States in order to fulfill orders in Germany. So, if the conflict in the Middle East continues, that probably only accelerates.

Again, this is a seasonal trade. I start to shift from bearish to neutral to bullish this time of year, but in the short term, it looks like we are pretty much stuck in a range.

If you’d like to know more about how to trade natural gas, please visit our educational area.