Natural Gas Price Forecast – Natural Gas Continues to See Support

Natural Gas Technical Analysis

The natural gas markets have gone back and forth in the early hours again on Monday as we continue to see the $2.50 level offer a bit of a short-term floor. All things being equal, this is a market that I think is starting to look ahead to the colder temperatures. And therefore, I think you have to be bullish. It doesn’t mean that you have to be aggressively bullish, but it does mean that when it does pull back 10 to 20 cents or so, you have to start to think about putting some money to work.

Keep in mind, this is a highly volatile contract, so therefore you need to be cautious with your position sizing, and I take care of that through an ETF in the United States called UNG. Now, if you don’t have that ability, then you can do so with a CFD contract. You just have to trade it with much smaller increments than you might do in the currency market. I believe that the $2.50, $2.40 and $2.20 levels all are crucial in maintaining the uptrend.

We have seen a hurricane move into the neighborhood of refinery. We have seen the Chinese start to use more natural gas for big rigs. And now we’re about to see colder temperatures hit the Northeastern United States in the next few months, which of course futures markets are already starting to price in. All of this bodes well for natural gas going into the next several months, as this cyclical trade picks up.

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