Natural Weekly Price Outlook – Natural Gas Continues to See Lackluster Performance

Natural Gas Weekly Technical Analysis

The natural gas market has drifted a little bit lower this week, which is not a huge surprise because, quite frankly, we have a situation where natural gas is out of season. This time of year typically you do not have any real demand for heating because of temperatures being warm in the United States, but it’s not hot enough at the moment to worry about heat waves and electricity demand. Furthermore, there are some questions about economic growth and if it is in fact starting to slow down, that could drive demand lower as well.

All of that being said, the market will eventually see traders pricing in cold weather and if and when that happens, it’s very likely that natural gas will pop to the upside because of demand. You could make an argument for a massive weekly head and shoulders, but the price that it would be suggesting is closer to $1. So, I don’t really think that is something that you can count on.

But what we can say is that we broke down below the $3 level, an area that should have been much more supportive than it turned out to be I think short-term rallies offer selling opportunities at the first signs of exhaustion, but really at this point in time, I have no interest in buying. I think this is a one-way setup, at least for a while, at least until we start talking about winter contract months in the futures market. I do believe eventually we’ll try to find the $2.50 level below.

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