Natural Gas Price Forecast – Natural Gas Continues to Rally

Natural Gas Technical Analysis

The natural gas markets have rallied significantly during the course of the trading session on Friday, as we have broken above the $3 level, at least initially. That being said, there is a massive amount of resistance above as we had formed a double top back in June, so it’ll be interesting to see if we can get above there. The Relative Strength Index is in an overbought condition, so that also comes into the picture, but really when I look at this, the thing that I would pay the most attention to isn’t even on the chart. It’s the hurricane that just ripped through the Gulf of Mexico area.

The question is, did that damage and slow down production enough to drive prices higher? Probably in the short term, but I do recognize that we are getting much closer to the end of this run than we were at the beginning. I took profit yesterday, I’m okay with that. I don’t have any reason to chase this. If we break out to the upside, so be it, I’ll wave goodbye to the trend. Ultimately though, I do think we are about to hit a bit of a brick wall when it comes to resistance, and I think in that environment, you have to be very cautious.

I’m not looking to sell this market. I’m just looking to walk away from it and look for some type of pullback that offers value that I can take advantage of as we head into colder months in the United States. The futures markets are already trying to price that in a bit, but I would anticipate a little bit of a get back after we recognize that the hurricane didn’t bring down the Gulf of Mexico production or any of the refineries for a longer term period.

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