Natural Gas Price Outlook – Natural Gas Continues to See Pressures

Natural Gas Technical Analysis

The natural gas market has been a little bit negative in the early hours of Thursday as we continue to consolidate overall. Ultimately, this is a market that I think given enough time will have to determine what it wants to do next as we have a lot of moving pieces at the same time. After all, we have seen the market try to gauge the idea of demand at this time of year, which, of course, is typically softer than other times of the year as heating won’t necessarily be a driver.

Now, electrical consumption, of course, comes into the picture as well, as electricity, of course, is quite often driven by natural gas plants. That being said, if a slowing economy is what we are in fact going to see, that drives down the demand for natural gas, along with those warmer temperatures and lack of demand from heating.

So, with all of that being said, I think you have a situation here where you very well could see natural gas continue to be noisy, but I think ultimately the real question is, can we break down below the $3.50 level? Because if we do, then I think you have a real shot at natural gas breaking down for the season, which is what I would expect given enough time, at least in normal years, that’s what you typically see.

So, with all of that being said, I find this a market that I’m looking for signs of exhaustion after short-term rallies to start shorting. I think the $4 level will now start to act as a bit of a ceiling. And if we can break above the $4.20 level, then we could go to the $4.50 level, which I think is even more resistive. So, I’m looking for a short-term pop, signs of exhaustion, and then I short, that’s how I’ve been playing this for a couple of weeks now.

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