Natural Gas Price Analysis – Sellers Eye Shifting Range Between $3 and $3.50

Natural Gas Technical Analysis

The natural gas market tried to rally in the early part of the Tuesday session, but has failed as the area above the 200-day EMA continues to offer a bit of a barrier. Markets at this point in time will continue to see a lot of choppiness. I think, really, at this point, a lot of this comes down to the fact that we are stuck in the summer range as per usual, which typically is pretty quiet. We recently had a bout of extreme heat in the United States, but we also had more than enough supply out there to keep the market fairly calm.

Oversupply Dynamics and Seasonal Ceilings

We didn’t get any type of massive spike because of the oversupply of natural gas. Now, that being said, eventually we start to head into the season where heating becomes an issue, and that’s more of a constant drain on natural gas. There is plenty of natural gas in storage at the moment, so it seems like we’re just hanging out right around the 200-day EMA.

The $3 level, underneath, I believe, offers a floor in the market. The $3.50 level above offers resistance. If we can break out to the upside and above the $3.50 level, I won’t be a buyer; I’ll be waiting for signs of exhaustion and then start shorting again, as the market cyclically, this time of year at least, is really negative or at best flat like we’ve seen over the last month and a half or so. If you are a short-term trader, then going back and forth on short-term charts can work, but you, of course, will have to sit here and babysit the charts.

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