Natural Gas Price Forecast – Natural Gas Sees a Brick Wall on Friday

Natural Gas Technical Analysis

The natural gas market initially tried to rally a bit during the course of the trading session on Friday, but the $3.40 level has offered a bit of a brick wall. This is an area that’s been important multiple times over the last couple of years. So, it’s not a huge surprise that after we go parabolic and slam into it, that we see a bit of selling. Whether or not this selling can push the market too much lower remains to be seen, but at this point, it looks like we are racing towards the $3 level.

The $3 level of course is a large round psychologically significant figure that a lot of people need to be paying close attention to, and I imagine a lot of options traders are focused on. If we break down below that level, then it opens up the possibility of a move down to $2.80 and then $2.50. The size of the candlestick is pretty impressive on Friday. So, I would assume that there will be some follow through to the downside, but whether or not it trend changes, I doubt it because quite frankly, it’s cold in the United States and it’s only going to get colder.

So, over the next couple of months, we should see demand pick up. Now, keep in mind that the spot market is also heavily influenced by the futures market, which is looking out ahead. So, in the next couple of months, we’ll start to focus on spring, even though it’ll still be cold in the United States. So, the season’s a little shorter than you would think. Nonetheless, I think this is a buy on the dip opportunity and it is offering you that opportunity. However, we need to see some momentum to the upside before we can risk any of our trading capital.

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