Natural Gas Technical Analysis
The natural gas market continues to see a lot of quiet trading and at this point in time the 50 day EMA seems to be a bit of a magnet for price. And at this point in time, we were also hanging around the crucial and psychologically important $3.50 level. Ultimately, this is a market that given enough time, will have to make a bigger decision. But as things stand right now, I suspect that we have a situation where we are trying to form some type of range between $3.15, maybe $3.10 on the bottom and $3.80 above. So, we are pretty much right around the middle of this potential rectangle.
Keep in mind that this time of year is typically very negative for natural gas as the market will continue to see a lot of questions asked about demand due to the fact that heating isn’t necessarily a necessity in the United States and Europe. This of course is something that I am paying close attention to as we go forward. That being said, as we get deeper into the summer, we will probably see more demand for natural gas due to electrical demand for air conditioning. However, right now, I continue to favor fading short-term rallies and taking advantage of the seasonality of the trade more than anything else. However, make sure to be cautious with your position size, as this market can move quite rapidly at times.
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