Natural Gas Price Analysis – Natural Gas Rises as Contract Rolls

Natural Gas Technical Analysis

The natural gas market gapped higher to kick off the trading session on Wednesday as we rolled into the July contract. All things being equal, this is a market that’s going to start to think about heat waves in the summer, things like that, so it might lift a little bit, and in fact, we have seen that right away. If we do rally from here, the $3.27 level is an area that I think is a bit of a ceiling.

Technical Analysis and Market Outlook

If we see signs of exhaustion, I think you have an opportunity to start shorting again. This is still a market that I don’t think has too much life in it during the summer. There will be the occasional heat wave and that of course has a major influence, but given enough time, I do think this market will probably drop from here, perhaps trying to reach the 50-day EMA.

I look for short-term charts such as the 1-hour chart in order to show signs of exhaustion and then get short for small trades, maybe a day or 2 long. This is something that I do every year to pad my account. It’s nothing that’s ever a big trade, it’s not a big deal, but we are clearly in the wrong time of year for natural gas to scream to the upside for anything other than a specific weather-related event. This is a market that I have no interest in buying, at least not anytime soon. Even with a heat wave, that is short-term, and I would look to fade it.

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