Natural Gas Price Analysis – Natural Gas Continues to Trade in a Range

Natural Gas Technical Analysis

The natural gas market has rallied just a bit during the early part of the trading session on Tuesday as it looks like we are threatening the $3 level. The $3 level of course is a large round psychologically significant figure that a lot of people will be watching, and any rally above the $3 level could open up a move to the $3.10 level.

I think most of this is probably driven by the uncertainty in the Middle East, but most traders forget this is a US contract mainly. So, I think this is just going to open up another shorting opportunity. I have absolutely no interest in buying natural gas at this point in time.

Market Exhaustion and Seasonal Demand

I will short this market on signs of exhaustion near $3 or $3.10, and most certainly at the 200-day EMA at $3.28. I do think this market probably drops quite a bit towards the $2.60 level over the next several weeks because we are at that time of year where demand just isn’t that strong.

It’s not really cold enough to have a lot of heating demand, and in general, air conditioning demand is pretty light. So, I continue to look at this as a market that you’re looking for selling opportunities.

That’s a seasonal trade that I take year in and year out to just pad the account. It’s not a big move; it’s just something that repeats time and time again and is a well-known part of the natural gas markets by the majority of traders.

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