Natural Gas Price Analysis – Natural Gas Continues to Bump Along the Floor

Natural Gas Technical Analysis

The natural gas market bounced slightly during the trading session on Thursday, but really at this point in time, it’s a market that’s just bumping along the bottom.

That makes a certain amount of sense, considering this time of year has a major lack of demand, like an anchor on the market. I think given enough time, we probably have a situation where we will bounce one way or another. Once we do, you should be looking for signs of exhaustion that you can fade.

Technical Barriers and Seasonal Demand

The $3 level, I believe, will continue to be an important resistance barrier from a psychological and a structural point of view. If we break above there, then we are looking at the 50-day EMA as a major barrier as well.

A breakdown from here is very possible and that could send this market looking toward the $2.75 level. As things stand right now, it looks like natural gas has found an area it’s comfortable in, and therefore, I think this becomes a back-and-forth kind of range-bound trading environment for intraday traders on short charts.

I think we have finally gotten to the point where we are just pricing in the fact that demand will collapse. There just won’t be a need for heating, although once we get to hotter temperatures, air conditioning can bring up the demand part of the cycle from time to time, but generally, you’re speaking about heatwaves. We are probably right around where we’re going to spend most of the next couple of months waiting for those cold temperatures to come back into focus.

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