Natural Gas Price Outlook – Natural Gas Continues to See Ceiling

Natural Gas Technical Analysis

The natural gas market was all over the place on Wednesday as we tested the crucial $3.50 level but could not hang on to it. All things being equal, this is a market that I do think has a lot of overweight pressure and the 50 day EMA above is considered to be a technical indicator worth paying attention to and I think ultimately, this is a market that will sell off.

Now, whether or not it does it here is a little early to decide, but if we broke down below the 200 EMA, that would be a very strong sign of selling pressure coming in and overtaking the market. I do recognize that this is a market where the lack of demand, because of lack of heating demand, is certainly going to weigh upon the price. At one point, we bounced 50%, and now we have another strong move during the session on Tuesday, but Wednesday just doesn’t have the follow-through.

So, with that being the case, I’m watching this very closely. I’m recognizing that we are squeezed between the 50 day EMA and the 200 day EMA indicators, and therefore we could see a fairly significant move. I do favor the downside. I would love to short an exhaustion candle. We’ll wait to see if we get it. I do think that we originally were looking to break below the $3 level. I think we revisit that area before it’s all said and done.

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