Natural Gas Price Analysis – Natural Gas Rises Early on Tuesday as Heat Increases

Natural Gas Technical Analysis

The natural gas markets have rallied early on Tuesday as we continue to see the range play out. We are in the midst of a little bit of heat in the United States, but quite frankly, it’s nothing out of sorts and there is plenty of supply. Despite the fact that several European World Cup teams are essentially wilting in the heat, this is normal behavior in North America this time of year. With that being the situation, it makes perfect sense that we stay in this range.

I would say in the short term, and when I say short term, the next few days, you’re probably looking at more upward pressure than down. But we have had this little pop in temperatures for about 6 days, so it’s really not enough to tear down the supply much. And of course, traders will be watching the natural gas storage numbers later this week. Keep in mind that Friday is Independence Day in the United States, so that’ll have an influence on when the futures market is open as well.

Technical Support Levels and Trading Strategies

Keep in mind that the $3 level looks very much like a floor, especially considering that we have the 50-day EMA sitting just above there. The $3.50 level above is a bit of a barrier. If we break above it, I don’t buy it and chase it. I look for signs of exhaustion to start shorting it because it will roll over.

It’s very difficult not to get FOMO when you see that, but quite frankly, I have found over the years that typically you do better off shorting these insane pops that you get during a heat wave. Again, though, that being said, I don’t know that we have enough to rattle the market for anything serious.

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