Natural Gas Price Analysis – Natural Gas Continues to Sit on a Floor

Natural Gas Technical Analysis

The natural gas market continues to see a lot of back-and-forth trading near the $3 level on Thursday, as there has been a lot of downward pressure in this market, as we continue to see this as a situation where there are not enough cold temperatures in the United States to pick up the market.

That being said, I do think there is a very real world in which the cold weather in the United States causes a massive spike. This time of year, we are starting to think about spring, so if we do get a spike, I am actually looking to short the market on the first signs of exhaustion. You could try to play that pop and quite frankly we just don’t know when that is going to happen.

Potential Shorting Areas and Support Levels

The $3.50 level, the 200-day EMA, and the $4 level all come into the picture as potential shorting areas. If you can get involved in a pop higher, that is fine but recognize that the market probably runs out of momentum much quicker than you think.

Ultimately, if we do break down from here, the $2.75 level is your next support level and an area that has been important multiple times over the last several years. I believe this is a market that sits on the floor right now, but quite frankly, will get another pop that probably gives us a shorting opportunity again.

If you are nimble enough, you could probably take advantage of that to the upside as well. A little bit of sideways back and forth action for you day traders is probably what we are looking at right here, so if you have a short-term consolidation type of system, this might be a decent market for you. Keep in mind natural gas can rip higher and plunge lower rather viciously, so by all means, take care of your position sizing.

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