Natural Gas Price Outlook – Natural Gas Continues to Stall

Natural Gas Technical Analysis

The natural gas market has gone back and forth rather choppily during the trading session on Tuesday, as we are sitting just above the 50 day EMA. Keep in mind that the $3.80 level seems to be a bit of a barrier as it was previous support, it should now be resistance. It’s also worth noting that the 50 % Fibonacci retracement level is right around the $3.88 level. So, I think that comes into the picture as resistance as well.

All things being equal, this is a market that I think given enough time will continue to see a lot of volatility, and it is worth noting that heating demand will be dropping. So, while you can get a little bit of a rebound due to storage tanks being refilled after the winter, that generally only lasts for a little while and then you start to see the market roll over. Europeans are buying liquefied natural gas from the United States, and this, of course, is a US contract being a Henry Hub natural gas. So that has an influence as well.

That being said, we are running out of momentum and volume on the upside is much lower than it had been on the downside. So, I still favor the selling of this market if we can close below the 50 day EMA. But I also recognize it’ll be a very volatile market, to say the least. I don’t really have a situation where I want to be a buyer of natural gas, barring some type of external event that has natural gas skyrocketing, some of those unforeseen incidents that can happen from time to time. But as things stand right now, I do think that we are kind of in this area here, which has been very difficult to get through in both directions for that matter, multiple times. And now I’m just simply looking for more exhaustion.

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