Natural Gas Price Analysis – Natural Gas Gaps Lower at Open

Natural Gas Technical Analysis

The natural gas market gapped to the downside during the early part of the trading session on Monday, as it looks like we are starting to focus again on the idea that perhaps there is going to be a situation where the lack of heating demand in the United States will continue to be a major problem.

And with that being the case, I think it makes sense that we drop to the $3 level. I don’t have any interest in buying natural gas, and quite frankly, if it does rally from here, it’s only going to end up being a nice selling opportunity before it is already said and done.

If we were to break down below the $3 level, it opens up the possibility of a drop down to the $2.75 level, and possibility even lower than that.

Technical Boundaries and Seasonality

The $3.40 above, I think, is offering a bit of a ceiling, with the 200-day EMA, of course, coming into the picture as well. Ultimately, this is a choppy, sideways action, I think, that suggests that we are trying to find another reason to start shorting.

Even if we were to break out to the upside, I would just simply stand on the sidelines and wait until I had an opportunity to short from a higher level.

This time of year, I’m just not a buyer. Really, the only thing that may or may not allow natural gas to take off to the upside is, generally speaking, some type of heat wave, but that’s almost always a short-term thing.

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