Natural Gas Price Outlook – Natural Gas Continues to Look to Spring Despite Storm

Natural Gas Technical Analysis

The natural gas markets have rallied a bit in the early hours on Friday to reach the 50 day EMA. We are getting fairly close to filling the gap that occurred about a week and a half ago or so. And at this point in time, I think you’ve got a situation where you are looking for signs of exhaustion to start shorting. I understand that there is cold weather coming to the United States, and this might be the last hurrah, as it were, because before you know it, we’ll be focusing on spring.

In fact, the futures market is already trading in the March contract, so the later we get into this contract, the less momentum you will see to the upside. While you could make a trade on the upside based on the cold temperatures coming, I believe in a week or week and a half to the United States, the reality is the futures market is on a different timeline than that. So, I hope it spikes and then I can start shorting again. I’d be particularly interested near the $4 level.

This is a market that’s very seasonal, and that’s something that most traders don’t understand. And most of the CFD traders around the world, unfortunately, are foreign and don’t understand that this is actually a US contract that they are trading 99% of the time. So therefore, it’s based on America, not the rest of the world, although exports can come into the picture. With that being said, be cautious but I’m actually starting to look for signs of exhaustion that I can get short of.

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