Natural Gas Price Analysis – Natural Gas Pricing in Hot Weather in the USA

Natural Gas Technical Analysis

The natural gas market rose on Monday as we are starting to see people price in the hot temperatures coming to the United States in the next few days. In fact, in the Northeast, it’s going to be in the low 90s Fahrenheit, so roughly 32°C or so. And of course, that will drive up demand for air conditioning.

Now, having said that, I also recognize that this time of year is not typically that hot and it will be very short-lived. So, if you’ve been following my analysis here at FX Empire for a while, you know that I like to fade rallies and this is one that I definitely will be fading.

Watching for Signs of Market Exhaustion

The question is when, and that, of course, is not something that I determine; it’s when the market decides that it’s had enough. I want to see signs of exhaustion that I can start shorting.

There is an argument to be made for perhaps buying in the short term, but that’s only if you’re day trading and even then, I wouldn’t recommend it. Natural gas has a horrible tendency to turn around on a dime, so I’m watching the 200-day EMA at $3.30. That’s a level that I talked about previously in several videos here at FX Empire.

Assuming we get anywhere near there, I’m going to start selling at the first hourly exhaustion candle. If we break below the $3 level, I’m willing to start selling there as well. I have no interest in buying natural gas at this time of year.

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