Natural Gas Price Outlook – Natural Gas Continues to Bounce Back and Forth

Natural Gas Technical Analysis

The natural gas markets have gapped to the downside to kick off the trading session on Monday as traders continue to pay close attention to the $3 level as a potential support level. The $3 level was a previous resistance barrier, and it is of course a large round psychologically significant figure and an area where a lot of traders will be looking at this via options markets also.

And because of this, I think you have a real shot at seeing some support in this area. For what it’s worth though, cold weather in the United States is here, and one would assume that demand starts to pick up. With this being the case, I think you have to look at this as a market that will continue to consolidate in this general vicinity, and it has to pay close attention to the $3.40 level above. If it can break above the $3.40 level, then I think you have a real shot at the market taking off and going much higher, perhaps even as high as $4.

On a breakdown below the $3 level, I see support at the $2.80 level, the 50 day EMA, and then again at the $2.50 level. This is a cyclical trade. It is cold in the North. That’s really what natural gas tries to anticipate. This is not something that you hold on to for months and months, but it does end up moving with the weather.

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