Natural Gas Price Outlook – Natural Gas Drops Slightly in Early Thursday Trading

Natural Gas Technical Analysis

The natural gas market has gone back and forth during the trading session on Thursday in the early hours as we have broken below the $3.50 level, but at this point in time, it looks like we are running out of momentum in either direction. If we can continue lower, and I think that does make quite a bit of sense considering that this time of year is typically bearish, then we could challenge the 200-day EMA near $3.31. Anything below there opens up the possibility of a drop down to the $3 level, which is something that I do expect to see sooner or later. This area will certainly attract a lot of attention, and also makes a lot of sense as a common target.

When you look at the structure of the market, we most certainly have just made a much lower high. So, with that being the case, I think the market continues to be noisy, but I also think it continues to be more negative influence than anything else. After all, markets continue to see a lot of questions asked about demand as we are heading into a traditionally weak time of year and of course the fact that if there is going to be a global slowdown, that drives down need for electrical production, which is quite often done via natural gas so, with that, I think you’ve got a scenario where natural gas definitely leans to the downside. I fade rallies, I have no interest in buying.

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