Natural Gas Price Analysis – Natural Gas Rallies to Start the Week

Natural Gas Technical Analysis

The natural gas market has risen a little bit during the trading session here on Monday as there’s been so much in the way of noise that it’s difficult to imagine that we’ll get a clean move. I think ultimately this time of year is typically bad for natural gas anyway, so it makes a lot of sense that we would see resistance above, probably closer to the $3 level.

Supply and Seasonal Demand Factors

The $3 level, of course, is a large, round, psychologically significant figure and an area that has the 50-day EMA approaching it as well. So, I look at that as a potential area to start shorting. The market will have the occasional bounce, perhaps driven by headlines coming out of the Middle East, but the reality is that this is a US contract which happens to export to other places, so this could be a driver – eventually.

So, most of what’s driving it is going to be heating demand or, in this case, the lack of heating demand in places like Philadelphia, Boston, and New York. As long as that remains low, then I think you’re looking for signs of exhaustion after a little bit of a bounce to start shorting. I don’t necessarily think you’re looking for a big move; I just think you’re looking for an opportunity to get a little bit more real estate from which to short and gain from that short position. I have no interest in buying natural gas this time of year.

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