Natural Gas Price Analysis: Surprise Storage Numbers Send Natural Gas Flying

Natural Gas Technical Analysis

The natural gas markets have jumped pretty significantly in the early hours on Wednesday as we are to start jumping from the June to July contract. So therefore, rollover will have an effect, but we also have to keep in mind that there are hotter temperatures coming to the United States in the next week or so, much hotter summertime temperatures. And the mix of that and the fact that the supply numbers were a lot lower than the anticipated supply being in storage, it caused a big bullish jump.

The problem you have here is that it jumped 50 cents, and you can’t chase that. At this point in time, I do think that we may continue to rise a little bit and then show signs of exhaustion that I’m willing to short. I think it’s a fateful event. I could be wrong and at $4.15, I will fully fold that and admit that we may go to the all-time highs, which is totally against the grain on how this contract normally acts.

One thing I do know though, is if you tried to jump in here and chase a 50 cent gap, you’re probably going to do irreparable damage to your account. So, with that being the case, it’s more or less a wait and see situation unless for some reason you bought natural gas, then of course you’re very happy. I do think at this point in time, we are going to extend a little bit, show signs of exhaustion via a shooting star or just a big black candle that we can follow to the downside to fill the gap.

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