Natural Gas Price Outlook – Natural Gas Has a Volatile Early Tuesday Session

Natural Gas Technical Analysis

The natural gas markets have been pretty noisy in the early part of the Tuesday session, falling pretty significantly only to turn around and rally straight back up to the 50 day EMA. With that being said, it’s a market that I think is obviously going to remain noisy and that makes a certain amount of sense this time of year, considering that quite often you are starting to enter the beginning of the bottoming pattern, if you will, of the weak season for natural gas. After all, natural gas demand crumbles in summer unless there’s a heat wave for electricity. Production of natural gas is needed. But when it’s not cold, there isn’t as much heating demand, and obviously that hasn’t been the issue.

That being said, we are starting to switch to contracts that might be a little bit more amicable to higher prices. We are in the October contract right now, and in a couple of weeks, we’ll roll over to the November contract, which of course, November starts to look a little colder in the United States, so demand will pick up. So, I think we’re right in that kind of state of flux that every year can be a little bit difficult for traders to get their heads around because you never really know exactly when it takes off, but it certainly looks like it’s trying to.

I am bearish of natural gas in the short term, but if we can break the 200 day EMA, then I’m just flipping the entire script and going long. As things stand right now, I think we’re just kind of bouncing around the $3 level. I’m not as bearish as I once was, but I’m not exactly bullish either. It’s like I said, a bit of a transition phase.

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