Natural Gas Price Outlook – Natural Gas Continues to Test a Trendline

Natural Gas Technical Analysis

The natural gas markets have rallied just a bit during the trading session here on Friday as we continue to hang around the 50 day EMA. The 50-day EMA is an indicator that a lot of people will pay close attention to. The uptrend line here, I think, from the last couple of months is now offering significant resistance. Anytime that you get near that uptrend line, you start to see market memory come into the picture.

When you look at the last couple of months, we are sitting around the middle of a larger consolidation area between $3 on the bottom and $4 on the top. As we are basically right dead in the middle, it’s a very neutral market, but I do think it continues to see quite a bit of negativity every time we rally, showing signs of exhaustion, I think, makes sense. This time of year, typically you have a lot less demand for natural gas. So, I’m more comfortable fading rallies.

The 200 day EMA sitting near the $3.38 level could be a short-term target, followed by the $3.18 level. Now, I don’t necessarily think we’re going to see a massive breakdown because the Europeans continue to import US natural gas, but this time of year typically is a little softer. Really, the natural gas market looks somewhat like the broader markets on the whole, which are just kind of going sideways right now. We are in the dead of summer, typically a very quiet market for most assets, regardless.

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