Natural Gas Price Analysis – Natural Gas Continues to Fall Apart

Natural Gas Technical Analysis

The natural gas market has fallen yet again during the early hours on Thursday as we seemingly just can’t quite find the floor. The natural gas markets are getting ready to kick off the so-called death cross when the 50-day EMA starts to break down below the 200-day EMA.

Ultimately, this is a market that I think continues to be very noisy, and I do think that, really, it’s almost impossible to buy this market at this point. Yes, is it oversold? Yes, we have seen a massive drop and a bounce is probably coming sooner or later but I think some type of bounce from here will end up being a selling opportunity at the first signs of exhaustion.

Demand and Supply Constraints

We are trading the April contract, which means demand is going to fall through the floor in the United States, and unless we get some type of absolutely vicious winter storm between now and then, I just don’t see a lot of hope for a massive move.

The $3.50 level will probably end up being your ceiling for the foreseeable future, assuming that we rally at all. If we drop from here, the $2.60 level is the next target based on historical pricing, followed by $2.50.

The supply of natural gas is still very strong, and despite the fact that we had a fairly significant winter in the United States, it was not enough to burn through all of the supply that we had seen previously, and therefore we are now in that fade on the rally type of situation.

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