Natural Gas Price Forecast – Natural Gas Continues to Look Sick

Natural Gas Technical Analysis

The natural gas market has been rather negative in the early hours on Monday, as we continue to see a lot of noisy behavior overall. Quite frankly, this is a market that, given enough time, is probably going to have to make a bigger decision. But as things stand right now, I think we’ve got a situation where traders are just simply looking for some type of floor. I think it’s a good investment eventually, but the problem with saying that on a platform that is visited by so many retail traders is they don’t understand the word investment.

It’s all about, I want to press the button and I want to get rich today, but the reality is that the natural gas market doesn’t work like that. It’s a very difficult market to get right, and retail traders really shouldn’t be involved with anything more than a percentage of their portfolio. I choose to trade natural gas through an ETF because I can avoid the high leverage, but also, I don’t have to worry about the day to day or the rolling over or any of that stuff that you might get in the futures market.

I do think natural gas rallies, and I think it rallies quite nicely, but we need to find the bottom first, and therefore you have to be willing to sit and ride out the negativity which will end whenever it ends. We just don’t know. We are hanging around the $2.25 level. That’s an area that some people will pay attention to.

And I do recognize that above the $2.50 level is a significant barrier. If we can break that, then we really will start to take off to the upside in my estimation. But we are just as likely to drop down to $2.15 before seeing that. So, I’m waiting for a bounce and some type of follow through. I already have a position through an ETF that is a little bit better than breakeven at the moment, and I did collect some profit several weeks ago, but at this point in time I am looking to reload that position.

I haven’t seen the market do enough for me to get involved yet, but it is something that I’ll be buying and probably more likely than not selling sometime in fall or maybe even early winter. Once the high season for heating comes back to play.

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