Natural Gas Price Outlook – Natural Gas Continues to See Consolidation

Natural Gas Technical Analysis

The natural gas market continues to attempt a recovery as we are hanging around the crucial 200 day EMA. The 200 day EMA of course is an indicator that a lot of people will be watching, but really at this point the other thing that I’m watching is the previous uptrend line that is now starting to come into the picture as potential resistance. If we break above there, then the 50 day EMA offers resistance near the $3.53 level.

All things being equal, I do look at this as a market that you should be looking for exhaustion to start selling, because quite frankly, the markets really at this point in time are trying to test this area, perhaps offering a nice selling opportunity as the lack of demand this time of year is well known. It is a cyclical market that quite, frankly, looks at the lack of heating demand in the United States and Europe and we just see oversupply.

This year is a little bit different in the sense that the Europeans are starting to import more natural gas from the US. So, it has kept prices elevated a bit. But I still think at this point in time, we are essentially stuck between the $3 level on the bottom and the $4 level on the top, with more of a negative bias. So, I’m looking for a rally here in a long wick on a candle that I can start shorting again. Right now, I’m just going to let it backfill and give me the opportunity in the next few days.

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