Natural Gas Price Forecast – Natural Gas Continues to Rally on Tuesday

Natural Gas Technical Analysis

The natural gas market rallied again during the early hours of Tuesday as we continue to see a massive move higher. Ultimately, I do think that we’re going to try to get to the $3 level and we are pricing in colder weather coming as futures traders of course are a couple of months out from here.

Furthermore, we also have the Chinese looking to use natural gas for bigger rigs and shying away from crude oil. So that’s been part of the divergence that we’ve seen between the energy markets. Nonetheless, this is a cyclical trade every year. And if you’ve been watching me here, you know I’ve been talking about this. The question of course is, can we get all the way to the $3 level?

I don’t see any reason why we cannot, but that doesn’t mean that we go straight up in the air to get there. Short-term pullbacks should end up being buying opportunities, especially near the $2.50 level. If we break above the $3 level, then the $3.15 level is an area that I think we would target next. If we turn around and break down below the $2.50 level, then the $2.35 region is an area where I think a lot of value hunters would come back in.

Regardless, I don’t have any interest in shorting natural gas, at least not yet, and I personally have been involved in an ETF, which has performed quite well, but the reason I’m in an ETF is because I do not want to get over levered to this market. This is a market that can be very dangerous if you’re not careful, so keep that in mind.

For a look at all of today’s economic events, check out our economic calendar.