Natural Gas Price Outlook – Natural Gas Continues to Focus on Weather

Natural Gas Technical Analysis

The natural gas markets have rallied a bit in the early hours on Friday as we continue to work our way higher. Colder temperatures in America, of course, are to blame, but let’s be honest here, we are getting fairly close to the end of the winter season. And in fact, we roll over into the April contract in just about 12 days. So ultimately, I think we will start focusing more on springtime temperatures, which of course are warmer.

Even if we do rally from here, I believe that the $4 level is going to be a bit of a bridge too far. And therefore, it’s probably only a matter of time before we start selling again. If we broke above the four dollars level, I would be a bit surprised. But in that environment, I become even more interested in the downside. It is worth noting that the Thursday candlestick was a shooting star. And although we are grinding a little bit higher in the early hours on Friday, it looks like we’ve got some overhead resistance in the same general vicinity.

Because of this, I think it’s probably only a matter of time before markets roll over and challenge the 50 day EMA. And then after that, I might go looking at the uptrend line underneath for some type of target. That being said, keep in mind that the natural gas markets are extraordinarily volatile. They are weather driven, they’re supply driven, they’re transmission line driven and everything else. But this time of year is typically when we start to see the markets drop back down as stockpiles of natural gas will naturally rise.

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