Natural Gas Price Outlook – Natural Gas Continues to Drift Lower

Natural Gas Technical Analysis

The natural gas market has dropped again during the trading session on Monday, as we just cannot find our footing. This does make a certain amount of sense due to the fact that we are heading into a time of year that’s traditionally pretty weak. And of course, a time of year that as temperatures moderate, the heating drops, but also the demand for electricity may be dropping if we continue to see a slowing U.S. economy. Whether or not that actually ends up being the case remains to be seen, but as things stand right now, this is a market that I believe is probably reaching towards the $3 level.

Keep in mind that natural gas does have a certain amount of cyclicality to it. So, none of this would be surprising to me. Quite frankly, the biggest surprise that I have seen was that we didn’t fall like this quicker. With this, I think you have to look at this as a market that is now below the 200 day EMA. And I think ultimately this is an area where I would be looking for signs of exhaustion to short again. The $3.50 level is a major resistance barrier as it dissects a major uptrend line as well. If we break down below the $3 level, then the market really starts to fall apart. I have no interest in buying natural gas whatsoever during this kind of market action and time of year.

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