Natural Gas Price Outlook – Natural Gas Continues to Pressure Resistance

Natural Gas Technical Analysis

The natural gas markets have reached the $3.40 level to slam into that massive resistance yet again. At this point, the stochastic oscillator is in the overbought condition and is rolling over so that does lead a little bit of credence to this resistance holding, but quite frankly, it’s about the fundamentals. Temperatures are dropping in the United States, and we will get more demand, but that doesn’t necessarily mean we break out right now.

Essentially, what I’m looking at is a potential pullback to the $3 level where things get interesting from a long standpoint again, or a breakout above the $3.45 level on a daily close, which could open up a move to the $4 level. This time of year is typically very bullish for natural gas due to higher demand coming from places like Boston, Cleveland, Columbus, Pittsburgh, etc. to heat homes.

With all of that being said, it is a cyclical trade that I use every year I buy a little bit. I don’t go crazy with leverage. I make a few percent to add to my account winnings for the year and leave it at that. You can do this either through a smaller CFD position or an ETF like I use here in the United States called UNG. But there are other ones, I believe BOIL is one.

But at the end of the day, this is a market that gives you a nice trade in the fall and winter of every year. But remember, it’s based on futures contracts, which means sooner than you think it will be focusing on spring and then the price will collapse. A nice solid cyclical trade that we’re in the middle of and now we’re just waiting to see if we break out and go higher or do we pull back and buy some type of bounce?

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