Natural Gas Price Forecast – Natural Gas Continues to Look Bullish After Gapping

Natural Gas Technical Analysis

The natural gas markets gapped to the upside on Tuesday to show a lot of. Momentum potential at this point and pulling back suggests that we could find buyers on the dip, and that is essentially what we’ve seen so far. If we can turn around and break to the top of the candlestick, then I think we have a potential move to the $3 level just waiting to happen. The $3 level, of course, is a large round psychologically significant figure and an area where I think a lot of people would be paying close attention to.

If we can break above that, then the $3.20 level would obviously be where the next selling pressure is due to the fact that we have peaked at that level a couple of times. A pullback from here could see plenty of support at the 50 day EMA near the $2.66 since level. And anything below there could be rather ugly, but it looks like we are going to continue to see a lot of questions asked about the demand in the colder months in the United States. It certainly should be picking up.

So, I do think that we will see a continuation of the uptrend. That being said, some of the impulsive move that we had seen previously had more to do with hurricanes. So, combine the two, of course you are going to go higher. Now we’re starting to focus on temperatures plummeting and that of course drives up demand for natural gas. I have no interest in shorting this market, at least not yet.

Although once we get into the middle of winter and we start pricing out the spring, it does become an excellent short. This is a cyclical trade that I do every year, and it looks like it’s about to kick off again. I don’t do so with much leverage. I tend to do it with an ETF, but if you use a small CFD position, you can also accomplish the same. Whether or not we can break above $3.20 will be the question this winter.

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