Natural Gas Price Outlook – Natural Gas Continues to Test the Uptrend Line

Natural Gas Technical Analysis

The natural gas market initially plunged during the trading session here on Tuesday to reach towards the 200 days EMA, only to bounce a bit from there and now we are retesting the previous uptrend line. If we can break above the uptrend line, we then have to face the 50 day EMA above there. Breaking above the 50 day EMA would be bullish. And at that point in time, you’d have to think that the market’s probably going to climb to the $3.80 level, perhaps even the $4 level.

If we were to break down below the bottom of the candlestick from the trading session on Tuesday, then we could break down below the 200 day EMA, maybe sending this market down to the $3.20 level. Breaking down below then opens up the $3 level. The $3 level is a large, round, psychologically significant figure in an area that’s been important multiple times. I do think that’s your target, as this time of year, it is typically very bearish for natural gas, and quite frankly, the only reason we show any real strength is due to the fact that the European Union is currently importing US natural gas.

If they stop doing that, I imagine natural gas would probably collapse. After all, they can’t buy it from the Russians. And although demand is not that high, if this keeps up, I suspect this winter, natural gas is going to absolutely launch higher if it’s anywhere near remotely cold in North America. However, in the short term, though, I think we are still looking for signs of exhaustion that we can sell. And I do think that we will eventually find our way down to the $3 level.

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