Natural Gas Price Analysis – Natural Gas Continues to See $3 Ceiling

Natural Gas Technical Analysis

The natural gas market initially tried to rally during the trading session on Thursday, but the 50-day EMA continues to cause a bit of resistance that traders will be watching very closely. After that, the $3 level gets targeted as potential resistance and at this point, I think this is a market that anytime it jumps, you’re looking for signs of exhaustion to start selling.

My email inbox is full of questions about why natural gas didn’t take off after the strikes in the war, and the answer is simple: this is the United States we’re talking about. The rest of the world doesn’t matter when you’re trading the NG contract or natural gas at most CFD brokers. There are exports coming out of the United States, but it’s extraordinarily expensive to send liquefied natural gas across the ocean, so that’s somewhat limited.

Seasonality and Demand Outlook

The reality is that natural gas is probably going to jump later this year but right now that’s not the case. Natural gas does have a seasonality to it that you need to pay attention to, and right now in the United States, there’s almost no heating demand, and there certainly isn’t much in the way of cooling demand.

Now we are going to get some hot temperatures early next week, so that could lead to a short-term bounce because of electricity demand for air conditioning, but quite frankly, that won’t last that long.

So, I will let the natural gas market bounce towards the $3 level before rolling over and start shorting again. The $2.60 level, maybe the $2.55 level, I think, is eventually the target.

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