Natural Gas Price Outlook – Natural Gas Drops Slightly on Thursday

Natural Gas Technical Analysis

The natural gas market gapped lower to kick off the Thursday session as we find ourselves dancing around the 50 day EMA yet again. This is a market that I think is in a bit of a state of flux right now, and it’s difficult to trade because of it. On one hand, you have the fact that it’s not overly cold right now, nor is it overly hot. So demand for natural gas for heating or air conditioning is pretty much non-existent in the United States.

That being said, we are getting ready in the next week or so to start thinking about the November contract, which is cooler, and that might be what launches the price higher. You’ll notice that the last time we shifted contracts from September to October, there was a gap higher. I wouldn’t be surprised to see that happen with November. In the short term, though, we may drop a bit and just simply consolidate right around the $3 level.

If we rally at this point and break above the $3.24 level, we would clear the 200-day EMA, which would be bullish. I do believe that sooner or later, we will go higher. And with that being the case, the market could go looking at the $3.60 level, possibly even the $4 level. But that would be more of a mid-winter thing. We are starting to get fairly close to that time of year when natural gas takes off, but right now, we aren’t quite there. And therefore, I think you get a lot of sideways choppy action.

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