Natural Gas Price Outlook – Natural Gas Continues to Look Strong

Natural Gas Technical Analysis

The natural gas markets continue to threaten the $3.15 level in the spot natural gas markets for a bigger breakout. At this point, I think it’s probably all but inevitable, but the question now will be whether or not we can get some type of momentum to make it happen now or if we have to continue to wait. Short term pullbacks should continue to be buying opportunities in this market that of course is cyclically driven. What I mean by this is that as temperatures plunge in the Northeast area of the United States, as well as places like Quebec, you have more demand coming online for natural gas and therefore drives up the price. It happens every year.

This is a wild market at times, though, so your position sizing will be crucial. I would be very cautious about putting a ton of money into it right away. But the nice thing about natural gas is that once it gets going, it typically goes for a while. The market recently has formed a bit of a W pattern, which, of course, is bullish as well, or you could even look at it and say, we are in the midst of trying to break out of a bullish flag. Either way, it all points to higher pricing given enough time. Short-term pullbacks should see plenty of support, especially near the $2.76 level where the 50-day EMA currently resides. It looks as if it is trying to curl higher from a 45-degree angle, so that’s a good sign as well.

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