Natural Gas Price Analysis – Natural Gas Bounces Slightly on Thursday

The natural gas market rose a bit in the early part of the Thursday session as we continued to teeter back and forth around the $3 level. The $3 level of course is a large round psychologically significant figure that a lot of people will be watching, but furthermore you should also keep in mind that if we do rally from here, the $3.20 level could be a little bit of a barrier followed most certainly by the $3.50 level. This is an area where a lot of selling has occurred previously.

Natural Gas daily candlestick chart showing prices holding near the $3.00 area with resistance around $3.20 and $3.50. Source: TradingView.

This time of year, tends to be very negative for natural gas due to the lack of demand when it comes to cold weather in the United States. All things being equal, I do think it is probably a market where you’re looking for signs of exhaustion to start fading.

Technical Ceilings and Seasonal Headwinds

The 50-day EMA happens to be at the $3.50 level right along with the 200-day EMA which is just a little bit higher. Those could offer little bits and pieces of resistance, so I think that’s probably your short-term ceiling unless of course there is some type of external factor.

All things being equal, this is a market that I’m looking for signs of exhaustion to fade. This time of year, just typically isn’t very good, but with that being said, we are pretty beat down, so a little bit of a relief rally wouldn’t necessarily be the craziest thing. If we break down from here, the $2.75 level is an area I’d watch for support to keep the market afloat.