Natural Gas Price Analysis – Natural Gas Continues to Go Sideways Despite Heat

Natural Gas Technical Analysis

The natural gas market has shown itself to be very choppy at the moment as we are hanging around the 200-day EMA. That being said, there was a little bit of a pop, but that was based on the idea of a heat wave in the United States. The problem with that is that the heat wave is very short-lived. We’re talking 4 or 5 days.

Supply in the natural gas tanks in the United States is plentiful at the moment, so it really doesn’t put a lot of damage into the market as far as the supply and demand equation. Because of this, I think we’ve only got a certain amount of time before the markets will remain somewhat quiet.

Seasonality and Technical Outlook

But eventually, I would anticipate that traders will start to focus more on the seasonality, perhaps sending natural gas down to the $3 level. Anything below the $3 level opens up the possibility of a move to the $2.75 level. Rallies at this point in time will continue to keep an eye on the $3.50 level, an area that is significant resistance.

I would look to short the market, but what I look for this time of year is some type of overextended knee-jerk type of rally that I can take advantage of. Clearly, we don’t have that here. So, unless you’re a short-term trader, you’re probably looking at a lot of back-and-forth scalping, almost, which is fine; you just have to be able to sit and watch the charts.

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