Natural Gas Price Analysis – Natural Gas Continues to See Overhead Selling Pressures

Natural Gas Technical Analysis

The natural gas market has found itself drifting a little bit to the downside during the trading session here on Tuesday, with the 200-day EMA offering a bit of a resistance barrier that extends, I believe, all the way to the $3.50 level. At this point, the $3 level, I believe, is your target in the short term, with perhaps the 50-day EMA offering support before we get there, possibly shrinking the profit target a bit.

All things being equal, keep in mind that the natural gas markets are likely to continue to see downward pressure in general because of mild temperatures in the United States and, of course, the fact that there’s no heating demand. There is a bit of talk about potential exports going to Europe increasing price later this year, but it also looks like Qatar has about 80% of its production back already, so that may not be a factor later this year either.

Seasonal Demand Factors and Trading Strategies

Ultimately, this time of year, I look for signs of exhaustion that I can start selling. We did start to see that on Monday, piercing the 200-day EMA and turning around to form a shooting star. I think we eventually drift lower at this point, as we are looking at a bearish tone to the market.

This is a short-term trade. This isn’t some costly, get-rich scenario, but I use this to pad my account this time of year, just like in the winter, I only buy because demand generally will pick up for heating.

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