Natural Gas Price Outlook – Natural Gas Continues to Levitate

Natural Gas Technical Analysis

The natural gas markets have been a little bit negative in the early hours on Thursday, gapping lower, But really at this point in time, we are just simply continuing the overall sideways action that we had seen for quite some time. The market is in the midst of trying to sort out whether or not price is going to finally roll over due to the winter season ending or if we are going to continue to stay at these elevated levels.

Now, there are a lot of different things going on at the same time that could come into the picture here, but I think what you have to keep in the back of your head is that sooner or later, the demand for natural gas does fall. It could be a recession, it could be temperatures, or in the case of the United States, it might end up being both. And if that’s the case, then obviously there’s no real reason for natural gas to continue going higher over the longer term.

Typically, this time of year, we do fall apart, but it’s very noisy as you can see. When you look at the recent swing high, it formed a horrible candlestick. And it’s also worth noting that on the weekly chart, the previous week was pretty ugly as well. So, I think we’re still in that transition phase. If we can break down below the 50 day EMA, then there’s a real shot that we continue to drop and perhaps reach towards the trend line and then eventually $3.50, by the time the move’s over, we should be much lower than that, but that’s my initial thought process here.

For a look at all of today’s economic events, check out our economic calendar.