Natural Gas Price Outlook – Natural Gas Continues to Be Noisy

Natural Gas Technical Analysis

Natural gas continues to hang around the 50 day EMA, an indicator that a lot of people obviously pay attention to. With that being said, the market is still struggling to get back above the $4 level. And I do think this is an interesting time, mainly due to the fact that the temperatures in the Northeastern United States, as well as Europe, are going to be climbing. So therefore, demand should be dropping. In that environment, it’s likely that we will continue to see a lot of questions asked about demand. If we were to break above the $4 level significantly at least, then it’s possible that we could go look into the $4.20 level.

That being said, this time of year typically favors the downside. So really what I’m looking for is either a break of the bottom of the hammer that was formed on Thursday or some type of exhaustion candle. The market dropping from here could send natural gas down to $3.50, but this is a very erratic and noisy market to say the least. So, you do have to be careful. You don’t just jump in and go crazy.

The market has been pulling back for the last couple of weeks, but it’s been a grind. It’s not a lot in the way of momentum showing up in this market. That doesn’t mean that I’m willing to buy it. It doesn’t necessarily mean that I’m willing to jump in with a huge position, but I am trying to short it at this point. Natural gas, typically this time of year, will start to drop fairly significantly. So, with that in mind, I’m looking for signs of exhaustion. We’ll see if I get them.

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