Natural Gas Price Forecast – Natural Gas Continues to Attempt a Recovery

Natural Gas Technical Analysis

Natural gas markets look a little stretched on early Monday, but really at this point, you have to keep in mind also that Monday was Labor Day in the United States and Canada. So, a huge swath of those who would be trading this market are gone. The futures markets of course, focus on overnight electronic trading. So, you can only read so much into that.

And at this point in time, it does look like we are trying to dig into an area that previously had been significant resistant. As you know, I have been advocating for low leverage and more of an investment approach to natural gas in order to take advantage of the cyclical swing higher. I don’t know that we are there yet.

So, at this point in time on short-term pullbacks, I like the idea of buying ETF positions, if you will, just to keep the leverage down. And that way you don’t have to worry about the day-to-day fluctuations as much as you would, perhaps in a futures market position.

The $2.20 level underneath has been important multiple times, and I think we’ll continue to look at it as such and therefore it could offer significant support. If we were to break above the $2.40 level, that opens up the door to the $2.50 level, but right now I think we’re just a little overstretched to make that kind of run. After all, the demand isn’t quite there yet, but it will be coming in the next several months.

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