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Natural Gas Technical Analysis
The natural gas market has dropped a bit, a little bit, during the very early hours on Friday, as we continue to see the cyclical trade come into the picture. After all, heating is a major driver of where natural gas goes, as far as price is concerned. And now that there’s not as much need for heat, it makes sense that natural gas in fact drops in value. We are not quite to the time of year when we see the demand for AC pick up, at least not for a few months. So really, we’re in that quiet period where we get the initial bounce, from refilling storage in the US. And now that it’s done, you see the market dropping again, as the demand simply cannot keep up.
At this point, it’s likely that the market is going to go to the $3 level, possibly even $2.83, where we bounced from the last drop. At this point though, I think any rally that shows signs of exhaustion is a selling opportunity, and I’d be a bit surprised to see us break back above the 50-day EMA. If we were to drop below that crucial $2.83 level, then I think that opens up the trapdoor and we could go as low as $2.50 rather quickly. I have no interest in buying natural gas. I simply fade it this time of year, every time it gets a little bit of a pop. This is a very bearish market and should continue to be going forward.
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