Natural Gas Price Analysis – Natural Gas Drifts Lower

Natural Gas Technical Analysis

The natural gas market has pulled back just a touch to cause issues early during the trading session.

As you can see, the market is still trying to deal with the gap that we had previously been looking at the beginning of the week. That being said, this is a market that has to worry about a lack of demand and, of course, a lack of real drivers to send it higher.

June Contract Roll and Resistance Levels

This is the beginning of the June contract, so we’ve seen a little bit of a gap during the rollover, but the reality is that the temperature in June may or may not be hot enough to drive up cooling demand. With the $3 level above offering a bit of a barrier, the 50-day EMA is right there as well, so I do think you have to look at that as a potential ceiling.

Anything above there would be very interesting, too short, quite frankly, anything near there would be very interesting, too short. The market showing signs of exhaustion will be my key to shorting yet again. I have no interest in buying natural gas this time of year; it just doesn’t really produce much in the way of demand, and as a result, the market is going to continue to see a lot of downward pressure over the longer term.

With this being the case, I just have to be patient, and right now we may see the market fill the gap here. I could very easily make an argument to short this, I just wouldn’t do it with size.

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