Natural Gas Price Analysis – Natural Gas Gives Back Some Gains

Natural Gas Technical Analysis

The natural gas market continues to be one that is very difficult to hang on to, and that makes a certain amount of sense considering how things have played out recently. The markets are in a seasonal type of cycle where things get pretty weak.

Seasonal Cycles and Market Weakness

After all, the demand for natural gas for heating is pretty much non-existent at this point. So as long as that is the case, then I just don’t see how natural gas takes off to the upside. The market is going to be one that I think you need to be very cautious with, very patient with, but if you see signs of exhaustion like we are already starting to see during the trading session on Monday, then it’s a shorting opportunity that most traders will pay close attention to.

It’s not short and hold, it’s just a short-term opportunity. Once we get to the middle of summer, then you start to worry about heating switching to air conditioning, and then air conditioning, of course, will burn quite a bit of natural gas, but we’re not there yet. We’re in that kind of in-between season and this is extraordinarily negative.

So, if natural gas rallies, I’m more than willing to sell the first signs of resistance near the 50-day EMA as we had seen previously on Monday, and then the $3 level after that. I have no interest in buying this market, as the demand for natural gas is simply dismal at the moment.

If you’d like to know more about how to trade natural gas, please visit our educational area.