Natural Gas Price Analysis – Natural Gas Continues to Struggle

Natural gas continues to see bearish pressure as the gap from Monday has already been filled. The natural gas market initially gapped higher on Monday and then started falling. On Tuesday we find ourselves just kind of hanging around with more of a negative attitude.

Seasonal Demand and Future Outlook

With that being said, I think you have got a situation where the market is trying to find the bottom somewhere near the $2.75 level, maybe even the $2.50 level. With this being the case, I think you need to see some type of bounce to even begin to think about buying.

While I do not necessarily like buying as we head into the spring, the reality is that there is probably a bounce coming sooner or later. That bounce is something that I almost immediately start looking at as a potential “fade the rally” type of situation. If we get to some type of exhaustion candlestick, especially if it is near $3.50 or even $4, I would be all over a short position.

I do not necessarily think that we have a huge pop ahead of us because, quite frankly, we are getting too late in the season, but I also recognize that this is a market that, given enough time, will probably, if nothing else, find value hunters. That is when I want to look in the other direction. The next couple of months, and we are rolling over into April on Wednesday, will feature a low-demand season. So, we are most certainly in a bearish realm here and I think that continues to be the case. You can buy the bounce, I suppose, but for myself, I prefer to fade rallies.

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