Natural Gas Price Analysis – Natural Gas Continues to Drift

Natural Gas Technical Analysis

The natural gas market did try to rally a little bit during the trading session here on Friday, but it continues to see a lot of overhead pressure not only from the 50-day EMA but from the $3 level as well.

Keep in mind this time of year is typically low demand and therefore I only short natural gas between now and any predicted heat waves, which are probably a couple of months away from in the United States. So, this time of year, generally speaking, it’s easier to just sell short-term rallies. I’m not looking for huge moves here; I just recognize the pattern seasonally and use it to my advantage whenever I can.

Seasonal Patterns and Technical Barriers

If we were to break above the $3 level, that does change some things, probably putting the 200-day EMA in focus at that point, but it would take a pretty significant move to make that happen. This would be a surprising move, but one that you have to be aware of the possibility of happening.

To the downside, the $2.55 level offers a bit of support and most certainly $2.50 will as well. I don’t really think natural gas goes far below there. This would be a major turn of events, but as things stand right now, I think smaller movements will be the norm in this environment.

I just think that if we do rally a little bit, you have an opportunity to short a contract that typically struggles, and this is one way I pad my portfolio every year, I just short natural gas in the appropriate seasons, and right now that is one of them.

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