Natural Gas Price Outlook – Natural Gas Continues to Look to Lower Levels

Natural Gas Technical Analysis

The natural gas market looks rather weak yet again during the trading session here on Wednesday in the early hours, and now, as we are in the midst of perhaps trying to break down below that ugly Tuesday candlestick, I think it’s possible we may try to get back to a previous gap near $2.50. This time of year is very poor for natural gas under most circumstances, but that doesn’t necessarily mean that we have to fall apart. That being said, though, there is plenty of natural gas in storage, and of course, the temperatures in the United States are very mild at the moment. So, the demand for air conditioning is not exactly taxing the system, if you will.

Obviously, there’s no heating demand, so that works against the natural gas market as well. That being said, in the next couple of months we will start to focus more on winter. And that, of course, is going to favor natural gas. So, I think it does make a certain amount of sense here that natural gas has a little bit more negativity and then eventually we’ll turn things around to show signs of life.

The $2.50 level is as good of a level as any other to turn around from, but it certainly looks like we’re going to at least try to go in that direction. Most of the last couple of months, I’ve just simply been waiting for short-term rallies to show signs of hesitation or weakness and shorting them. That will continue to be the way I trade in this market. I’ve got no interest in trying to fight the overall trend.

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