Natural Gas Price Outlook – Natural Gas Recovers Slightly on Tuesday

Natural Gas Technical Analysis

The natural gas market has bounced just a bit during the early hours here on Tuesday, which makes a certain amount of sense because we have fallen so significantly over the previous four or five sessions. At this point in time, I’m looking to short the natural gas market again after this bounce as I have exited my short position, as it is a fade rallies with exhaustion type of scenario. I think ultimately you have to look at this as a scenario where the $3.50 level, the 200 day EMA and even the 50 day EMA, all come into the picture to offer technical resistance. This is something worth watching going forward.

But we also have to keep in mind that lack of demand will be an issue this time of year. And with that being the case, I just don’t want to buy natural gas. We have a lot less in the way of heating demand coming out of North America and Europe. And of course, it’s not hot enough for air conditioning yet. So, unless we see some type of external event, it’s very likely that the natural gas market will continue to drift lower as it typically will do this time of year every year.

So, with that, I’m looking for opportunities to fade rallies that show signs of exhaustion, as I still think we go down to the $3 level, possibly even the $2.50 level. That being said, the market is likely to see a lot of volatility.

For a look at all of today’s economic events, check out our economic calendar.