Natural Gas Weekly Price Analysis: Natural Gas Continues to See Overhead Problems

Natural Gas Weekly Technical Analysis

The natural gas market initially fell to open up the week, then shot straight up in the air, actually gapping 50 cents on Wednesday and then has since fallen. When you look at the weekly candlestick, it looks a lot like a shooting star. So, I think we’re still in the same type of regimen here where we are shorting signs of exhaustion. And the weekly chart does suggest that eventually we get to the $3 level. Anything below there, then we probably break down to the $2.25 level. If we were to break above the top of the candlestick, then the $4 level will end up being a bit of a barrier as well, as it is a large, round, psychologically significant figure. And on the daily charts, at least, you can see how it has caused chaos.

All things being equal, keep in mind that this time of year is typically somewhat negative for natural gas as demand for heating drops off of a cliff. And of course, the refilling of the storage tanks will basically be done from winter use. At this point though, things are a little bit different in the sense that Europe continues to import US natural gas. So we may not go as low as we typically do, but either way, it favors the downside as far as the overall attitude of this market is concerned. And I just don’t have any interest in trying to fight that seasonal pressure.

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