Natural Gas Weekly Price Outlook – Natural Gas Chops for the Week

Natural Gas Weekly Technical Analysis

The natural gas market has been choppy during the previous week as we really haven’t had anywhere to be. Other than the $3 level, the $3 level continues to be a bit of a magnet for price as it’s a large, round, psychologically significant figure and of course an area where a lot of options traders would be interested in getting involved.

If we can break down below $2.85, then we could go lower, perhaps down to the $2.50 level. If we bounce from here, then we could look into the previous uptrend line, which I think will have a certain amount of resistance built into it, especially considering that the 50-week EMA and the 200-week EMA both sit there and offer a bit of resistance. Ultimately, I think we continue to chop back and forth.

I think there’s more of a downward bias. And I would also point out that if you look closely, we are forming a head and shoulders pattern. Now I fully recognize that it is a pattern that is probably a lot to take in, because quite frankly, the measured move is to like $1.20. But at this point, I think what it does show us is that we are likely to see downward pressure more than anything else, and I think that any rally that we get is a selling opportunity.

This time of year, it is typically poor for natural gas. So, I prefer to jump on shorter timeframes such as the daily or even the four hour chart to look for signs of exhaustion and start selling. Yes, it can rally. Yes, anything is possible, but the price action does not suggest that we are ready to shoot straight up in the air and go racing to the moon here.

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