Natural Gas Price Analysis – Natural Gas Rises Early on Friday

Natural Gas Technical Analysis

The natural gas market has gapped lower to kick off the trading session, only to turn around and show signs of strength again. That being said, there is a significant amount of resistance near the $3.50 level, and this, of course, is an area that I think will remain interesting to traders as resistance, as well as a potential options barrier. That being said, if we were to break above the $3.50 level, then we could see a big move to the upside. Ultimately, though, the natural gas market is typically pretty weak this time of year because the demand is really mainly driven by the idea of heatwaves, and we just don’t have one in the United States at the moment.

Ultimately, though, if we do rally from here, signs of exhaustion, I think, are to be sold into. Selling signs of exhaustion, I think, open up the possibility of a drop down to the 50-day EMA. The $3.00 level, I think, is your short-term floor. If we were to break down below there, the $2.75 level then becomes targeted.

Sideways Action and Range-Bound Trading Strategy

Ultimately, I think there are a lot of sideways action trades just waiting to happen. So, if you are a short-term trader with a range-bound system, this could be a good market for you. I don’t really see any reason to buy natural gas, and even if we do spike, I’ll just be looking to fade those at the first signs of exhaustion. Those are typically 5 or 10 days in length, unless there’s some type of really crazy weather pattern in the United States. Currently, it’s comfortable enough to have your windows open in most of the country, so the demand just isn’t quite there yet.

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