Natural Gas Price Analysis – Natural Gas Continues to Struggle to Hold Gains

Natural Gas Technical Analysis

The natural gas market has gapped lower to kick off the Friday session, tried to rally a bit, but then fell apart to show signs of exhaustion. By doing so, it looks very much like a market that is going to continue to see a lot of volatility and a lot of attention paid to the idea that the natural gas markets are oversupplied, despite the fact that the situation in the Middle East continues to be very destructive to supply. This change will take time to price in, as traders don’t fully understand what is coming next.

Key Support and Resistance Levels

We are at the wrong time of year expecting massive moves out of the natural gas market. After all, heating demand is all but nothing as we head into springtime. Beyond that, you also have a situation where traders are looking at the $3 level as a massive support level. This is an area that has been important, but it has been broken in the past. It remains important to traders via options and psychology in general.

Breaking down below that area could open up a move down to the $2.80 level, which, of course, has been supported previously. Any rally at this point in time, I think, has to struggle with the $3.50 level as a potential ceiling. The 200-day EMA and the 50-day EMA are hanging down in that neighborhood, so that also causes a little bit of resistance. I continue to fade short-term rallies in this market as it continues to be soft.

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