Natural Weekly Price Analysis – Natural Gas Continues to See Troubles This Week

Natural Gas Weekly Technical Analysis

The natural gas market has shown itself to be rather weak over the last month or so, and this past week did have a bit of an attempt to rally, and then it just gave it up. The $3 level is a large, round, psychologically significant figure that a lot of people will be paying close attention to.

The $3 level of the course is an area where we’ve seen a lot of resistance previously, followed by support, and now it looks like we’re just hovering here. Keep in mind that as we head into the April contract on Wednesday of next week then you have people talking about warmer temperatures.

Signs of Weakness After the Jump

The $3 level is important, and if we were to break down below $2.75, I think we could see this market drop to the $2 level sometime later this year. What I would prefer to see, though, is some type of rally that I can fade. Some type of real rally, something to $3.50 maybe even $4.

I have no interest in buying natural gas at this point, even if we do get a sudden and quick winter storm. Instead of chasing that trade, I think the best thing to do is look for signs of weakness after that jump because the cyclical trade is very much alive.

You can see that we are falling apart basically as soon as we spiked toward $7.50 during that massive storm a few weeks ago. The market looked ahead to the month of March and then April and now demand is going to fall through the floor over the next couple of months.

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