Natural Gas Price Analysis – Natural Gas Consolidates as $3 Support Holds Floor

Natural Gas Technical Analysis

The natural gas market continues to do very little as we are dancing around between the 50-day EMA and the 200-day EMA in what is typically a very quiet time of year. After all, the natural gas market is essentially a US contract based on US weather, and right now, we did just get through a couple of days of absolutely brutal heat here, but it wasn’t enough to destroy supply. And on top of that, we are starting to see things cool down a bit, so that will help as well.

Weather Drivers and Range Boundaries

At this point, I think we have to look at this as a market that is going sideways in general, with an outer level of $3 offering support and $3.50 offering resistance. If we were to break out of that range, it could mean quite a bit, but really, at this point, I think if we break above the $3.50 level, then I’ll be looking for signs of exhaustion to start shorting again, assuming it’s in the next couple of weeks.

As things stand right now, I think short-term traders continue to push this market back and forth, and if you like short-term charts, 5-minute or 15-minute charts, for example, this could be a decent market for you to trade. As far as a longer-term swing trade, it’s going to be difficult to see anything right now. So just recognize that the market you’re in demands short-term sideways-based trading systems as it has for basically 6 weeks now. It’s a difficult market to get aggressive in at the moment, so size will matter on your trades as well.

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