Natural Gas Technical Analysis
Natural gas markets are positive in the early hours of the Friday session as we are up about two and a half percent. That being said, this is setting up a short selling opportunity, as far as I can see, near the $3 level. Any rally towards that area will capture my attention, and on the first signs of exhaustion, I am selling. Ultimately, if this is a market that breaks above there, then you could look at the $3.20 level as another potential selling opportunity as well.
If we just turn around and fall from here, then keep an eye on the $2.75 level because it has been support over the last couple of days, but we have broken down below the massive $2.85 level support region. So, one would think there’s a little bit of a bounce, a perhaps retest of this and then start shorting again. Really at this point in time, I think this is a wrong time of year to look for a lot of bullish pressure, and as long as that’s going to be the case and the fact that the temperatures in the United States are fairly mild at the moment, I think it does make sense that natural gas struggles.
Now, having said that, there is a hurricane heading towards the U.S., and if it changes trajectory and threatens some natural gas refining down in the Gulf of Mexico, then that could cause a short-term bounce, which I am more than willing to start shorting at the first signs of weakness.
For a look at all of today’s economic events, check out our economic calendar.