Natural Gas Price Analysis – Natural Gas Climbs Slightly Early on Friday

Natural Gas Technical Analysis

Natural gas markets rallied a bit during the early part of the trading session on Friday, as it looks like we are, in fact, threatening the $3 level. The $3 level, of course, is a significantly important enough figure that will attract a lot of attention. I think signs of exhaustion are getting sold in this neighborhood, as demand for natural gas, of course, is anemic to say the least.

That being said, we are expecting hot temperatures early next week, which could cause a little bit of a bump. But I think along the way, anytime this market rallies, you’re looking to find signs of rolling over to start shorting. This is the play most of the time during this part of the calendar.

Seasonal Demand and Price Projections

I think ultimately you could perhaps try to send this market down to the $2.55 level. But right now, there are some buyers out there that will continue to make it drift to the upside. If we were to break above the $3 level, then it’s possible we could be looking at the $3.30 level, but that would take something extraordinary this time of year, as there is such a lack of demand out there at the moment.

This is typically one of the weakest times of year for natural gas, so I just look for shorting opportunities at the first signs of exhaustion. I don’t necessarily think that we’re going to break down significantly from here. I think we’ve made the big move lower; now, we’re probably going to be more range-bound with a lot of downward pressure.

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