Natural Gas Price Analysis – Natural Gas Continues to Languish

Natural Gas Technical Analysis

The Natural gas markets have continued to languish in trading as we are hanging around the $2.60 level with no real signs of a bounce. I do think eventually the natural gas market bounces, but I get conversations sent to me via email asking why natural gas is so cheap. This is an almost daily pattern, as many traders don’t actually know what it is that they are trading.

The answer of course is this is a North American contract; this is about the United States. Currently there is no heating demand out there, so it makes sense that there is no real drawdown of natural gas. That will perhaps start to change a bit after the damage done in Qatar, as the Europeans will almost certainly be importing more energy next year from the United States.

Market Outlook and Trading Strategy

But as things are right now, this is a market that I’m looking for any rally whatsoever to be a potential selling opportunity. I like the idea of being able to watch this market bounce, show signs of exhaustion, and then start shorting. I have no interest in buying natural gas at the moment, as the time of year is so bad.

I believe that the $3.00 level is a bit of a barrier and ceiling at the moment, and as long as we stay underneath there, I think the regimen is the same. You just simply short this market anytime it shows signs of weakness after a little bit of a bounce. The $2.50 level is an area that I think will end up being a significant floor in general.

If you’d like to know more about how to trade natural gas, please visit our educational area.