Natural Gas Price Analysis – Natural Gas Continues to See Overhead Pressure

Natural Gas Technical Analysis

The natural gas market has fallen a bit during the trading session on Thursday in early trading, as we continue to see a lot of sideways action. From a technical analysis standpoint, this makes a lot of sense, with the 50-day EMA underneath offering support, and the 200-day EMA above offering resistance.

With this being the case, I think you’ve got a bit of sideways action that will continue going forward, because we have a lot of different moving pieces. While this is typically a very quiet time of year, we are trading the July contract and that can lead to speculation of a heatwave. We are getting hotter temperatures in the United States over the last couple of days, but going forward, they are calling for cooler weather.

Technical Outlook and Support Levels

Any rally this time of year is typically short-lived, because most heatwaves are 5 days or so, and then it returns back to normal. The real question is going to be what happens this winter when the Europeans have to import quite a bit more US liquefied natural gas. I think this could be a good winter, but between now and then, I’m looking to fade signs of exhaustion after short-term rallies. If we break down below the $3 level, that opens up a move down to $2.75, maybe even $2.65.

Typically, natural gas is pretty quiet this time of year, so it is more or less a fade of the rally on a short-term chart type of setup for me most of the time. As far as buying is concerned, we’re a couple of months away from when I would truly be interested in that.

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