Natural Gas Price Outlook – Natural Gas Continues to See Resistance

Natural Gas Technical Analysis

The natural gas market initially did try to rally during the trading session here on Wednesday, but it looks as if it is going to struggle a bit. If we do break to the upside, the uptrend line should continue to offer a bit of resistance. But even if we broke above there, I think the 200-day EMA comes into the picture offering a bit of technical resistance. It’s worth noting that the 50-day EMA is starting to drop a bit to perhaps cause a bit of a crossover, which would be a death cross, which obviously is very negative.

So, with that being said, this is a market that I think if we do rally and show signs of exhaustion, you have to be looking for short positions because this time of year is typically very poor for natural gas as heating demand disappears in the Northern Hemisphere. And of course, it’s been a little hotter this year than usual, but typically this time of year, it’s comfortable enough that there isn’t a heavy load demand on natural gas to produce electricity for air conditioning.

The Americans have recently inked a deal with the Europeans, and one would assume that a bulk of the energy that the Europeans will be buying will be liquefied natural gas. So that may change the attitude of the market from a seasonal perspective, that might be part of why we are just hanging around above the $3 level. Most of the time in the month of July, you’re much lower than this. Nonetheless, there is seasonal negativity in this market that I wish to exploit. So, when markets rally and have ugly wicks to the upside, I’m willing to fade those rallies and start shorting, aiming for the $3 level. If we break down below $2.80, then I think the bottom falls out. I have no interest in buying natural gas, at least not at the moment.

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