Natural Gas Price Outlook – Natural Gas Rallies into Resistance Again

Natural Gas Technical Analysis

The natural gas markets have rallied a bit in the early hours on Wednesday as we are now in the same vicinity we had been in for the previous several sessions. The 50-day EMA, of course, will attract a certain amount of attention from a technical analysis standpoint, and of course, you have to keep in mind that the previous uptrend line is still in this neighborhood, so expect some noise from that as well. I still tend to be a seller of natural gas this time of year. This doesn’t mean all the time, but a directional bias.

We have had a nice bounce, but now at this point, I think the 38.2% Fibonacci retracement level continues to offer some resistance. If we break down from here and below the $3.50 level, then the 200-day EMA at $3.27 could come into the picture, followed by $3. If we rally from here, breaking above the $3.75 level, we could open up a move to the $4 level. But again, this time of year is typically a bit softer for natural gas as heating demand drops. And of course, if we are going to head into a recession, then it means we’ll need a lot less electricity. And if that’s going to be the case, then it’s likely that natural gas demand will drop on that as well. We don’t really have exhaustion yet, but this is an area where I’ll be looking for a long negative candlestick to start shorting.

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