Natural Gas Forecast – Summer Consolidation Traps Price in a Tight Range

Natural Gas Technical Analysis

The natural gas market has been very sideways over the last 2 months or so, which makes sense considering that this is a market that, quite frankly, really doesn’t have anywhere to be most of the time in the summer unless, of course, there’s a heat wave. There was a little bit of a heat wave over the last couple of weeks, but it was very short-lived, so it was not enough to drain the supply. We are hanging around the 200-day EMA, and it does make a certain amount of sense that the 200-day EMA attracts attention.

It is a well-known technical analysis moving average after all, so the fact that it’s flat suggests that we just really don’t have anywhere to be quite yet.

Range-Bound Trading Channels to Define Summer Action

Overall, this is a market that I think probably trades between the $3 level on the bottom and the $3.50 level on the top. In other words, we don’t really have anywhere to be quite yet. The market will occasionally see the heat pick up and perhaps send the price higher, but I think that would be short-term spikes that we could look to start selling.

I have no interest in buying natural gas this time of year, but I recognize that if you are a short-term trader, you may be able to take advantage of the range going in both directions as long as it holds. It’s a perfectly reasonable strategy if you choose to trade natural gas. At least until we break out, right now, though I just don’t see the catalyst. I think we continue the same pattern.

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