Natural Gas Price Forecast – Natural Gas Continues to Test $2

Natural Gas Technical Analysis

The natural gas markets have rallied slightly during the trading session on Wednesday, as it looks like we are trying to take out the $2 level. The $2 level above is a significant psychological barrier, as well as an area where we’ve seen a lot of previous support.

So, I do think that there is a very real possibility that this market will continue to look at market memory in that area and react. After all, $2 is an area that one would assume that there are a lot of options positions at. And of course, it is an area that has been important multiple times going through history.

The 1. 50 level underneath is a major support level. So I think at this point, what we are doing is trying to sort out some type of basing pattern from which to rally again. This is a long term set up. This is not something that you’re scalping because quite frankly, we don’t know when the demand will pick up.

There might be a winter storm between now and spring in the northern hemisphere, or it could be something along the lines of a heat wave later this year that drives nat gas prices higher. Nonetheless, if you are a swing trader, short term pullbacks should be potential opportunities to build up a position.

I would not be looking for big moves right away, though. At that point, I would only trade this through a very low leverage type of situation. For example, you could use an ETF or a very small CFD position so that you don’t have to worry about the day to day nuances of this market. Quite frankly, the supply of natural gas is still overdone, so that will continue to be a bit of an issue as well.

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