Natural Gas Price Analysis – Natural Gas Bounces as Futures Roll into June

Natural Gas Technical Analysis

The natural gas market has bounced a bit in the early part of the trading session on Monday, but really, at this point in time, you have to keep in mind that natural gas is in a very weak time of year as traders price in the idea that the United States just has no real demand. Temperatures are comfortable, there’s no heating demand, and it’s not so hot that air conditioning needs to be run all of the time either. So, with that, natural gas tends to be very soft.

Storage tanks are pretty full, but we are about to see massive amounts of exports being made to the European Union from America. That is a story for later this year, but that is a big story. As things stand right now, we are trying to bounce from the $2.50 level. I do think a short-term bounce probably makes sense here. I wouldn’t be a buyer of it. In fact, what I’m looking for is a bounce that shows signs of exhaustion that I can start shorting because, quite frankly, that’s probably the way this goes given enough time.

Seasonal Weakness and Trading Strategy

It’s just easier to follow the overall downward pressure. The 50-day EMA sits at the $2.95 level, and of course, we have the $3 level right above that, which could cause massive problems. You can see that we are rolling over to the June contract tomorrow, so that could be part of what we’re seeing here as well as people rolling forward contracts; it causes a little bit of disturbance in price.

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