Natural Gas Technical Analysis
Natural gas gapped lower to kick off the trading session and then continued to fall toward the 200-day EMA. That being said, keep in mind that Monday is a bank holiday in the United States and Canada, so we’ll have to wait and see whether or not that makes a difference with liquidity. A huge portion of natural gas trading is done out of North America. It is a North American contract, and therefore this is important.
Ultimately, not a lot has changed. We are still stuck between the $3 and $3.30 levels. This is a market that is starting to roll over into colder temperatures, and that should help demand, therefore increasing price. But we are at that time of year in the United States where it might get a little cold at night, but it is warm enough during the day that you are not really heating your home.
Back-and-Forth Trading to Be Expected
With all of that being said, I think you continue to see a lot of back-and-forth trading here. Ultimately, we are getting ready to roll over into the December contract at the end of the month, and that is a contract that, generally speaking, does fairly well historically.
A pullback from here could challenge the $3 level. That is an area that I would be very interested in due to the fact that it has been so important so many different times and, of course, has a certain amount of psychology attached to it.
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