Natural Gas Price Forecast – Natural Gas Continues to Power Higher

Natural Gas Technical Analysis

The natural gas market has been a bit positive in the early hours of Wednesday as it looks like we are trying to build up the necessary momentum to break out to the upside but quite frankly the $3 is an area where a lot of people will be paying close attention. At this juncture, if the market were to break down below the $3 level, then I think the $2.85 cents level is an area that a lot of people will be looking at as well. Keep in mind that natural gas has recently seen a surge due to the weather changing in the United States, which of course is a cyclical trade, and one that I take every year. However, I don’t use a leverage instrument, I’ll use an ETF.

But if you are trading the Contract for Difference Market, you just keep your position size small and wait for that cyclical trade to higher pricing. Because the one thing that retail traders almost always forget is that this is a US contract and it’s a futures contract or at least it’s based on it.

So, what you’re looking at now is a representation of the prices for a couple of months from now. What this also means is that sometime in the middle to back half of the winter prices plunge and that’s because we start to price in spring. All things being equal, this is a market that I think is buying on the dips, but natural gas is not a market that you put a ton of leverage into.

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