Natural Gas Price Forecast – Natural Gas Continues to Look For Momentum

Natural Gas Technical Analysis

The Natural Gas markets have gapped higher a little bit the Tuesday hours, but it also had seen a little bit of a pullback only to turn around and show signs of life overall. At this point, I think we’ve got a situation where the market is trying to get back towards the $3 level, a large round psychologically significant figure that a lot of people will be paying close attention to. The $3 level also probably has a massive amount of options there, so I would anticipate a lot of trouble to get above there for anything sustainable.

That being said, the market is likely to continue to see a lot of value hunting in the next month or two, mainly due to the fact that the futures markets are trying to price in winter demand. Natural gas, of course, is the choice for heating in a huge swath of the population in the United States, so this is essentially a US contract. If we do fall from here, then I would keep an eye on the 50-day EMA near the $2.65 level.

A breakdown below there then opens up the possibility of the $2.50 level as a support level and floor. In general, though, I think this remains buy on the dips going forward and with that being the case, I do look at this through the prism of trying to find value for the meantime and then probably dumping my holdings, whatever they may be then as we get closer to actual winter, due to the fact that then futures markets will start to focus on spring. This is a cyclical trade I do every year. It’s not a huge part of my account, but it is something I use to pad my returns.

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