Natural Gas Price Analysis – Natural Gas Tests Resistance on Tuesday

Natural Gas Technical Analysis

The natural gas market is currently hanging around the 50-day EMA, but more importantly, sits just below the $3.00 level. The $3.00 level, of course, is a large and psychologically significant figure that has shown itself to be important multiple times, so therefore a reaction here would not surprise me at all. In fact, I am simply waiting for confirmation at this point.

Natural gas is a market that really has no business rising for any significant amount of time this part of the year, mainly because the biggest driver of natural gas will be heating in the United States and of course that won’t be a thing at this point.

Market Drivers and Projections

And the other thing that can move during the year is when we get massive heat waves, so demand for air conditioning drives up demand for electricity, etc. That, of course, is several months from here as well. So, this is what is known as shoulder season and that means that it is in between major seasons and it’s typically very weak. This is the basis for all of my trading at the moment in this market.

I’m looking to short this market right here, right now, perhaps sending it back towards the $2.75 level, maybe even the $2.50 level given enough time. If we do break above the $3.00 level, I’ll just short it from a higher level, probably somewhere near the 200-day EMA. I have absolutely no interest in buying natural gas and therefore just look for a setup based on exhaustion that I can take advantage of.

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