Natural Gas Price Analysis – Natural Gas Looking at a Ceiling

Natural Gas Technical Analysis

The natural gas market continues to be very negative from what I can see and ultimately, I think it’s probably only a matter of time before we see a little bit of hesitation. This is a market that, given enough time, probably opens up the possibility of a drop down to the 2.50 level.

If we rally from here, the 50-day EMA is more likely than not going to offer a bit of a ceiling in the short term, and the 3 level is a large, round, psychologically significant figure that a lot of people will be watching as well. In fact, I think that is your ceiling in this market at the moment, as the seasonal demand case is still poor at the moment.

If we were to break above there, then the market could go looking to the 3.20 level, but quite frankly, I think we need some type of external pressure and issue to make that happen. Natural gas is typically very calm and quiet this time of year because, quite frankly, nobody is using it in the USA in this kind of weather.

With that being the case, I look at this as a situation where I’m looking for signs of hesitation so that I can start shorting. I do think that ends up being the situation that we find ourselves in and that is the trade setup I’m looking for. I don’t have any interest in going long in natural gas anytime soon, as the summertime heatwaves aren’t coming anytime soon.

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