Natural Gas Price Analysis – Natural Gas Continues to Look to Floor

NATURAL GAS Technical Analysis

The natural gas market continues to see a lot of noisy and, quite frankly, negative action towards the bottom of the range that we have been in. All things being equal, this is a market that I think continues to see the $2.75 level as a floor, and with that, I think we continue to see a lot of questions as traders are now starting to wonder whether or not the season ahead will continue to make this a very negative market. This is a cyclical trade that I take every year, simply fading signs of a bounce.

Remember, this is a market that is mainly based on the US and while there will be increased exports this year because of the damage done to Qatari fields and distribution, the reality is that’s not right now. Temperatures in the United States have warmed up; in fact, I have my window open at 8:00 in the morning as I’m doing this, and I’m quite comfortable.

Technical Resistance and Seasonal Outlook

So, with that being said, the market is likely to continue to see more of a fade, the rally type of situation here, and I think the $3 level is a psychologically significant barrier, and then of course the 50-day EMA, which is right around $3.25. I doubt we get there without some kind of external reason, though.

I like the idea of fading little bumps higher that show signs of exhaustion. I’m not looking for big moves; this time of year is pretty quiet most days. You’re talking about little micro movements, intraday type of shorts.

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