Natural Gas Price Outlook – Natural Gas Continues to Pressure Resistance

Natural Gas Technical Analysis

The natural gas market gapped to the upside during the early hours on Monday, and then promptly slammed into the $3.15 level. This is an area that’s had multiple points of resistance along the way, and I think it will continue to be a bit difficult. With that being said, I think you also have to look at this through the prism of a market that has just formed a W pattern, so that does suggest that sooner or later we could break out to the upside. The measured move would be to about the $3.60 level, which of course is where we had seen a swing high last winter.

This is the time of year when natural gas typically is a little bit stronger due to demand and really at this point in time we need to keep an eye on what the weather predictions are for the northeastern part of the United States over the next couple of months. As things stand right now it is elevated as a market but it’s not out of control and therefore, I think you could very well see an eventual breakout but that breakout for me at least is probably going to be more or less a process, not necessarily just the one shot deal, unless of course, we get some type of really bad weather down the road. Short term pullbacks should see plenty of support, all the way down to at least the 50 day EMA near the $2.78 level. Because of this, I look at pullbacks as potential buying opportunities in a cyclically and seasonally strong market.

For a look at all of today’s economic events, check out our economic calendar.