Natural Gas Price Outlook – Natural Gas Continues to Find Support at Same Spot

Natural Gas Technical Analysis

The natural gas market has gapped a little bit higher to the upside on Friday morning. We pulled back and then bounced enough to show signs of life. The $3 level is sitting just below, offering support as it is a large, round, psychologically significant figure. And with that being said, it’s very likely that we will stay within the $3 to the $4 range that we have been in. Ultimately, this is a market that is very seasonably sensitive, and at this point in time, we are in one of the lowest demand parts of the year, as there is no demand for heating, and it’s not quite hot enough to demand a lot of electrical production.

So, with that being said, I think you do have a situation where we probably get a little bit of a bounce due to the support, but ultimately this is a market that I’m looking for short-term rallies to start selling.

The 200 day EMA would be an area I’d be watching as a potential area to start selling, right along with the 50 day EMA. What I’m looking for is just the bounce and signs of exhaustion. If we break down below the $3 level, it’s really not until we clear $2.80 that I think the trap door falls. So, I’m not really looking to short this market, at least not from here. I want to get a little bit more real estate to cover in order to make it worth my time from a risk to reward perspective.

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