Natural Gas Price Forecast – Natural Gas Continues to Bounce Around Consolidation

Natural Gas Technical Analysis

It looks like natural gas markets are going to be comfortably consolidating going forward. And although we are testing the highs at this point in time, I don’t know that much has changed. It doesn’t look like we’re going to break out of the consolidation area.

So really there’s not much to look at here. Ultimately, if we do break higher and buy higher, I mean well above the $2 level, then things change drastically. At that point, you could see the beginning of a much bigger move higher. Whether or not that actually happens remains to be seen, but I certainly think at this point it’s what bulls are waiting on.

In general, I think between now and the next super spike, you will probably see a lot of consolidation. And this time of year, is typically not very bullish for natural gas anyway. So at that point I don’t really worry about it too much one way or the other. Granted, it’s probably worth noting that I have natural gas investments in an ETF, so I don’t have to worry about leverage and therefore the day to day fluctuations don’t really stress me out that much.

Ultimately, we’ve got a situation where traders continue to look at this through the prism of an oversupply situation in their most certainly is. But we do have a tight range between about a $1.50 and $2. That is somewhat compressing the market into a nice little predictable trading range. And if that’s going to be the case, then I think you’ve got a situation where you have to take advantage of it.

If you are short term inclined, however, don’t use big positions. I do favor the upside, simply because once we get below $1.50, the drillers will just simply leave and then eventually you’ll have a massive spike. I don’t think that happens. So, I think what we got here is just a market killing time.

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