Natural Gas Price Analysis – Natural Gas Continues to Drift Lower in Shoulder Season

Natural Gas Technical Analysis

Natural gas markets continued to drift lower on Wednesday, as we are in shoulder season. The natural gas market has drifted a bit lower during trading here on Wednesday as we continue to see shoulder season play out. Shoulder season is the time of year when you no longer see a lot of heating demand, but it is not warm enough for air conditioning electrical demand, especially in the South and Northeast parts of the USA.

In America, this is a time of year when natural gas demand is almost nothing. So, it is not a huge surprise to see that we continue to sell rallies, and we fail at the 50-day EMA.

Front Month Reliability at the 50-Day EMA

In fact, if you look at the 50-day EMA in the futures market, it has been pretty reliable in the front month contract going back to the beginning of February as a downtrend line. The $3 level sits just above there, and I think that is your ceiling until we get some type of heat wave.

We are nowhere near that right now. So, with that being the case, I think we do return to the $2.55 region. It does not mean we do it overnight and it could be a bit of a grind if nothing else.

With that being said, I like the idea that this market is one that we fade rallies. I typically do this time of year. I am not looking for big, massive drops. I am not putting big positions on. It is just a way to pad my portfolio.

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