Natural Gas Price Outlook – Natural Gas Falls on Tuesday

Natural Gas Technical Analysis

The natural gas markets have gapped a little bit higher to kick off the trading session on Tuesday, only to turn around and show signs of weakness again. At this juncture, I think we’ve got a situation where traders are going to have to look at the 50-day EMA underneath as a potential support level. Quite frankly, I don’t necessarily think that I want to get aggressively short of natural gas because quite frankly, this time of year is typically very bullish.

After all, the demand for natural gas does tend to pick up in the Northeastern part of the United States in the cold months and that’s essentially what we’re banking on. That being said, there’s an obvious double top trying to form here near the $3 level, yet again, and that does have an influence.

With this being the case, I think you’re looking at a situation where traders are probably going to come in and buy natural gas on some type of pullback in order to pick up value. If we were to break down below the 50 day EMA, then we could open up the market down to the 200 day EMA. Anything below there would change the trend, but I don’t really expect that to be the case. I don’t have huge positions in this market at any given moment, but this time of year I do typically tend to be bullish. So, any bounce, especially from the 50 day EMA, I’d probably put on a small tester position.

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