Natural Gas Price Analysis: Rally Could Offer a New Selling Opportunity

Natural Gas Technical Analysis

The natural gas market has rallied a little bit during the trading session here on Wednesday, but if you’ve been following me for any length of time, you know this time of year is toxic for natural gas. Any rally at this point I think has a ceiling at $3, especially with the 50-day EMA hanging out there as well.

Signs of exhaustion, I won’t hesitate to sell. And if we can break above $3, then I’d become really interested in shorting at $3.20. There is not enough demand this time of year to push natural gas higher with any real strength.

Geopolitical and Seasonal Factors

And of course, unfortunately, my foreign friends almost never pay attention to the fact that this is a US contract. What’s going on in the Middle East has a little bit of an influence, but not anywhere near as much as you would think. Where it really comes into play is whether or not Qatar can provide natural gas to Europe next year. This remains to be seen at the moment.

Winter could see really high natural gas pricing. But in the meantime, most Americans are sitting around with their windows open. There’s no heating, no cooling demand, no nothing and that will be the case for a while, so this remains very bearish from what I can see. I have no interest whatsoever in trying to get too cute here, I’m just going to let it rally, let it bounce, and at the first signs of trouble, I won’t hesitate to short.

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