Natural Gas Price Analysis – Natural Gas Continues to Respect Range

Natural Gas Technical Analysis

The natural gas market has done very little during early trading on Monday as we continue to go sideways. This is my general thought process for the market as of late; it’s a situation where any rally that we get, you have to look at as a potential selling opportunity. Quite frankly, the markets have been very noisy, but they’ve been in a very tight range, which makes sense considering this time of year is typically very lackluster for natural gas, as demand is so poor in the United States.

Market Drivers and Technical Levels

We have plenty of storage, and right now we have mild temperatures in the United States, so there isn’t even an air conditioning type of driven demand. The market is hanging around the 200-day EMA, which, of course, is a large, round, psychologically significant number as far as moving averages are concerned, and one that’s quite often used to determine the overall trend. This is an area that has been important more than once recently and continues to attract attention.

If we were to break to the upside, clearing the $3.50 level, I think it opens up a much bigger move. To the downside, we have the $3.00 level offering support. We’ll see if we break down below there because if we do, then the bottom drops out. Any rally at this point that shows significant strength, I’m willing to fade at the first signs of failure on any rally, as this time of year is bad for pricing most of the time.

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