Natural Gas Weekly Price Outlook – Tough Week for Natural Gas

Natural Gas Weekly Technical Analysis

The natural gas market initially did try to rally at the open for the week but has since fallen apart. At this point, we are testing the 200-week EMA and the $3.33 level. On the daily chart, this lines up with the 200 day EMA as well. So, there is a lot of noise going on at the moment. But if you look at the candlestick from the previous week, by breaking below the bottom of it, we have technically formed a hanging man pattern. Although not necessarily my favorite indicator, it does show that there’s a bit of capitulation as far as support is concerned.

With that being the case, I do think that we are getting ready to kick off a drop towards the $3 level, which of course will be noisy, but that’s typical for natural gas. Natural gas is probably one of the more volatile markets that I follow for FX Empire. So, with that being said, I like the idea of shorting on short-term bounces. And I do think that we get to $3 and we probably get lower than that as this season tends to be very poor for natural gas after you get a little bit of refilling of the storage tanks, as heating demand drops in both the United States and Europe. Furthermore, if there is actual concern of a recession, that means electricity production will drop and that is negative for natural gas as well. So, with that, I remain bearish.

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