Natural Gas Price Analysis – Natural Gas Gives Back Gains Quickly

Natural Gas Technical Analysis

The natural gas market initially did rally a bit during the trading session only to give back those gains as traders continue to look at the situation in the natural gas markets, understanding just how weak the demand will end up being this time of year. After all, we have a scenario where the only thing that really will drive up the natural gas market, at least more than the occasional blip, is going to be whether or not heating demand picks up.

And what I mean by that is we are looking at this through the prism of whether or not air conditioning demand picks up in America. That drives up electrical demand and there you go.

Contract Analysis and Short Strategy

But that being said, these are short-term blips and quite frankly so far, we haven’t seen that. We are in the July contract. That is a time when you typically do see a little bit of a bump at one point or another in demand. But again, that’s a 7-to-10-day boost, so I use those as selling opportunities.

Right now, I think we have a scenario where we are looking at this as an opportunity to short. We did try to break above the 200-day EMA, and we have rolled over again. So with that being said, I do think that the market is probably going to work its way back to the $3 level. This is an area that I think will remain important to the natural gas market going forward.

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