Natural Gas Price Forecast – Natural Gas Continues to Rally

Natural Gas Technical Analysis

The natural gas market has continued to be somewhat levitated during the trading session on Tuesday, as the $2.30 level is essentially a magnet for price, if you will. We’ve seen this before, so it doesn’t really surprise me that we find ourselves here. That being said, I think this is a situation where you have to be very cautious about getting overly bullish, but I have been building up a longer term investment position via an ETF. At this point, I’m not as inclined to add to it as I would be if we dropped 15 cents.

But I think we’re trying to price in a significant amount of heat in the southern part of the United States and that’s part of what’s going on. If we can break higher, the $2.50 level would be your next target. And after that, you’d be talking about $3. Cyclically speaking, this is still a pretty quiet time of year for natural gas under most circumstances.

So, I fully anticipate that we will pull back. And at that point, I’ll add more shares. If you choose to trade the CFD market, then just simply keep your position sign as reasonable so that you don’t have a ton of leverage to worry about. Leverage can get you killed in this market rather quickly as it is so inherently volatile as it tracks weather and of course transmission through natural gas lines in the United States and a whole litany of other things that are difficult for retail traders to fully grasp.

So, with that being said, I do think that the $2 level is probably going to end up being your basic floor. And the closer you get to that, the more likely you are to see value hunters coming in and getting involved, perhaps trying to get ahead of the surge that we will see when temperatures drop in North America.

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