Natural Weekly Price Outlook – Natural Gas Has a Neutral Week

Natural Gas Weekly Technical Analysis

Natural gas has been very noisy during the trading week as we have reached as high as $3.50, only to turn around and drop all the way down to the $3.09 level. This is a market that is hanging around the 50-week EMA as well as the 200-week EMA. And I think at this point, we are looking at this through the prism of whether or not we are going to break down through what had been previous support.

This is a time of year that is typically very poor for natural gas as heating demand drops off. And of course, we’re not hot enough to drive up electrical demand for air conditioning. Industrial electricity consumption is another question as well, due to the fact that we’re not sure about what the global markets are going to be as far as trade is concerned. It does not take a huge amount of imagination to suggest that maybe, just maybe, we’re trying to form a head and shoulders pattern on the weekly chart.

So, a breakdown below the $3 level would get me very bearish. Ultimately, though, I think this is a situation where anytime you get a rally, you have to look at it with suspicion. You have to think about shorting this time of year. And I have in fact been doing that. It’s a little difficult to do it from a weekly candlestick. But the weekly chart does suggest that on shorter timeframes, you can find entries to the downside. I have no interest whatsoever in buying natural gas at this point.

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