Natural Gas Price Analysis – Short Covering into the Weekend?

Natural Gas Technical Analysis

The natural gas markets have rallied a bit during the day on Friday to close out the week and that does make a certain amount of sense. If you are short of this market going into the weekend, you could get headlines that cause chaos. So, with that being the case, you have to be very cautious but also recognize that the natural gas market is likely to underperform what people expect because unfortunately, most retail traders don’t pay attention to the fact that this is a US-based contract. This means that the high prices you are seeing in Rotterdam-based contracts won’t necessarily translate here.

Potential Sell Opportunity

There’s about a 99% chance that you are trading on your CFD platform is a derivative of the Henry Hub contract. Demand will be low this time of year. In the United States as I do this analysis, I have my windows open, so it’s not like heating is an issue. The temperature will drop between now and the actual start of spring, but we’re looking at maybe one more winter blast and beyond that, we also have to keep in mind that the futures market is already trading April.

With this, I’m looking at any potential bounce as a selling opportunity. I’d be very interested in shorting closer to the $3.50 level, but I think what we’re seeing here is just some nerves heading into the weekend and therefore, I wouldn’t read too much into this. All things being equal, this is a market where, if you are patient, you can get a nice selling opportunity.

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