Natural Gas Price Analysis – Natural Gas Drops on Wednesday

Natural Gas Technical Analysis

The natural gas market has pulled back just a touch in the early part of the trading session on Wednesday, with the 200-day EMA offering a certain amount of resistance. The market falling from here, I think, makes a certain amount of sense. It’s just the wrong time of year to see massive moves to the upside. The 50-day EMA underneath offers support, right along with the $3 level.

I think we just go back and forth, but if we were to rally based on heat or something like that, and it will happen sooner or later this summer, that is a selling opportunity at the first signs of significant weakness.

Seasonal Market Outlook

Ultimately, natural gas is in a time of year where we’re just hanging out, trying to figure out where to go next. More likely than not, I think it’s $2.75 before it’s all said and done. But if we do break to the upside, like I said, I’ll just be very patient. I never buy natural gas this time of year. It just doesn’t make any sense.

The demand might pick up for a few days because of a heat wave, but the supply is extraordinarily full at the moment, so even that will probably be somewhat muted. With this being the case, I think you’ve got a situation where short-term trading back and forth might be possible, but you’re not looking for big moves in this market at the moment.

That’s pretty typical for June, which, of course, we’re trading the July contract. There will be a heat wave, like I said, that will cause a jump. That jump, more likely than not, ends up being sold into.

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