Natural Gas Price Outlook – Natural Gas Continues to See Selling on Holiday

Natural Gas Technical Analysis

The natural gas market initially did gap to the upside on Monday but then turned around and fell rather hard. Because of this, I think it shows that there is still a certain amount of negativity out there, but you also have to keep in mind that the Memorial Day holiday takes out quite a bit of the volume. The market is hanging around the 200 day EMA, which of course is flat, and of course is a very important indicator for trend. So, the fact that it’s flat and we’re just kind of chopping back and forth through it tells me we don’t really know what we’re doing, at least from a short-term perspective.

Longer term, I still think we have a lot of negativity in this market as the demand for heating will obviously drop off a cliff. And we, I believe, have spent most of our time over the previous couple of weeks, refilled all of the storage in the United States that we had to after winter. If we do break down from here, then I believe that the $3.00 could be a target or perhaps even the $2.85 level.

Anything below there opens up a trap door to the $2.00. If we do rally from here, then the $3.50 level is an area that could be rather important, especially with the 50 day EMA, as it sits right there. And I think that also offers a little bit of resistance. So, I’m still of the ilk of a trader who’s willing to fade the rally on signs of exhaustion. I just don’t see the catalyst to go higher.

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