Natural Gas Price Outlook – Natural Gas Continues to See a Ceiling

Natural Gas Technical Analysis

The natural gas market has been struggling with the $3.15 level in the spot market for some time, and the Tuesday session continues to be the same type of situation. I do believe given enough time short-term pullbacks will continue to be bought into, as we’ve seen over the last couple of weeks and if we were to get above the $3.15 level, then it’s possible that the market could go looking to the $3.60 level. In general, this is a scenario where every time we jump into this market, we need to find some value or at least momentum.

Right now, we just don’t have the momentum and if we pull back from here, the 50 day EMA comes into the picture at the $2.80 level, which I think is a short term floor. We are building up pressure and this time of year, we typically do see buyers jumping into the market and therefore I think we’ve got a situation where really what we need is cold weather in the northeastern part of the United States, which we don’t really have yet.

It is coming and it will certainly influence the market. So, I think short term pullbacks are buying opportunities, but you don’t want to be over levered because the natural gas markets can be extraordinarily volatile at times. By using a small position or even an ETF, you can mitigate a lot of the usual problems with a market that is based on weather, which is very difficult to predict. And of course, transmission numbers storage, etc. in the US.

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