Natural Gas Price Analysis – Natural Gas Looks Heavy

Natural Gas Technical Analysis

The natural gas market did end up trying to rally a bit during the early part of the trading session, only to roll back over. All things being equal, this is a market that I look at through the prism of a weak time of year. Keep in mind that the heating demand in the United States is all but nil, and of course, air conditioning demand could pick up, and we are trading the July contract, so that does keep it a little bit elevated, but it isn’t a massive bullish market waiting to happen at this point.

Seasonal Demand and Technical Barriers

But at the end of the day, I think you’ve got a situation where traders are looking at this as a market that, quite frankly, should probably start drifting towards the $3 level again, maybe even lower than that. This time of year, I do not buy natural gas even during the spikes, because those are short-lived. Those tend to last for a week or maybe 2 at the most and then give you an excellent shorting opportunity.

We are a couple of months away from what I consider to be a better time of year to buy this asset, so really, I look to see whether or not I have a shorting opportunity or I don’t. The 200-day EMA above should continue to be a bit of a barrier. The 50-day EMA below at the $3 level could end up being a bit of support. If we break down below that, then it opens up a move down to the $2.75 level.

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