Natural Gas Price Outlook – Natural Gas Continues to Struggle

Natural Gas Technical Analysis

The natural gas markets have initially tried to rally during the trading session here on Monday, but gave up those gains rather quickly as we continue to see a lot of heavy behavior here. Quite frankly, this is not a huge surprise considering this time of year is typically very poor for natural gas demand. We have broken through a major uptrend line that goes back to September of last year, but we also have the $3 level underneath offering a lot of support. There’s a huge gap there from the end of April. And really at this point, the $3 level, the large, round, psychologically significant figure, the area I think is going to continue to be a main focus that extends all the way down to the $2.85 level.

So, with all of that being said, I think you’ve got a situation where we are digging into some pretty significant support. So a short term bounce wouldn’t be a huge surprise, but that short term bounce, for me at least, is going to be a nice shorting opportunity near the 200 day EMA or the previous uptrend line.

If we were to break down below the $2.80 level, then we could see this market drop down to the $2.50 level rather quickly. But keep in mind, there also was a deal made between the United States and the European Union for the EU to buy 250 billion euros worth of energy from the US over the next three years, and that will probably have an influence on this market. We’ll just have to wait and see. All things being equal though, I am bearish. I will remain bearish for a while, even if we bounce. I’ll just be looking for a better entry to start shorting again.

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