Natural Gas Price Forecast – Natural Gas Continues to Look Heavy

Natural Gas Technical Analysis

The natural gas markets have been back and forth during the session, perhaps a little bit negative, but really at this point in time, natural gas is overextended. We do have a significant amount of heat in the United States over the next several days, and markets had been banking on that. However, that’s already been priced in, so the question then becomes, what’s the next catalyst? And for myself, the next catalyst is going to be a massive drop. Some type of massive drop in this market to at least the $2.50 level might get me into the market buying a few more shares in the ETF that I use.

If we break down below there, the $2.40 level is your next support level. And anything underneath there, the bottom falls out. This is a time of year that’s not typically very bullish for natural gas. Unless of course we get a massive surge of heat because a lot of the electricity produced in the United States is via natural gas. Above we have the $3 level. And that of course is a large round, psychologically significant figure that a lot of people will be paying attention to and clearing that on a daily close, I think really could send the net gas markets much higher.

In general, I think you have a lot of volatility and therefore if you are trading in this market, I would suggest that perhaps either an ETF or a small CFD position is the way to go. Quite frankly, you can make a killing in natural gas, but you can also lose your account in the blink of an eye. Most retail traders do not have the ability to forecast weather like a large firm would, and that’s exactly what you have to do in this market.

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