Natural Gas Price Outlook – Natural Gas Continues to Drift Lower

Natural Gas Technical Analysis

The natural gas market has continued to see a bit of selling pressure during the early hours on Wednesday as we see a lot of noise overall. Ultimately, this is a market that I think will continue to be a bit hesitant to get too bullish, mainly due to the fact that we have a seasonality problem here with a lack of demand for heating being a major driver of the troubles. But after that, we also have to keep in mind that electricity production in some countries is dropping.

Technical analysis for this market, of course, is that we just broke through a trend line, but we’ve more or less drifted through it and not necessarily fell apart. So, I don’t know that I would get overly excited about that, but I also recognize that any rally at this point in time more likely than not will see resistance in the form of the market memory from the trend line and perhaps more importantly, the 50 day EMA, which sits just above there.

Breaking down below the lows of the session just has natural gas drifting and grinding down to the $3 level. All things being equal, this is a market that I don’t like. I have no interest in buying and have made no qualms about presenting publicly that I am fading short-term rallies that show signs of exhaustion. It’s a market that I think will pay close attention to the 50-day EMA as a barrier, but even above there you have the $3.72 level, which has caused quite a bit of havoc recently as well. I think we will go lower, but I don’t think it’s a collapse this year like it typically has been in the past.

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