Natural Gas Price Analysis – Natural Gas Continues to Struggle in the US

Natural Gas Technical Analysis

The natural gas market continues to be very choppy and tight, as this time of year is typically pretty poor for natural gas, with a serious lack of demand being a major culprit. After all, this is a US-based contract and heating isn’t really much of a concern this time of year.

With that being said, once we get into the hotter summer months, you can see a spike in demand, but those are generally short-lived, maybe a couple of weeks here and there throughout the summer. The real question’s going to be how much natural gas the Europeans need to be buying here in the United States this winter after the damage to the Qatari pipelines. So that I think this could make this a very interesting contract down the road.

Seasonal Demand and Technical Resistance

As things stand right now, I look at rallies as an opportunity to start shorting again, especially if we get anywhere near the $3 level. The $3 level is a large, round, psychologically significant figure that attracts a lot of attention anyway, and on top of that, we also have the 50-day EMA sitting there at the same time.

With all of that being said, this is a market that I have no interest in buying, but anytime it rallies, I look at it as a potential selling opportunity at the first signs of exhaustion. The daily candlesticks get pretty tight on the chart this time of year and the ranges become very compressed, that’s perfectly natural.

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