Natural Gas Price Outlook – Natural Gas Continues to See Buyers

Natural Gas Technical Analysis

The natural gas markets have rallied rather significantly during the early hours on Thursday again, as we continue to see a lot of upward pressure. All things being equal, this is a market that is now trying to get to the $3.40 level, which is an area that has been massive resistance. Breaking above the $3 level the way we have suggests that perhaps traders are trying to get a grip on the idea of colder temperatures suddenly showing up in the northeastern part of the United States.

I also think that there might be a little bit of blowback or knock on effect due to the situation in Ukraine. Perhaps we are starting to see people try to price at the idea of Europeans having to step in and buy natural gas from the US as well. Either way, we are getting close to a pretty significant resistance barrier. So, we’ll see if that holds. The volume has picked up a little bit over the last couple of days, but probably not enough to get overly excited about from that point itself.

For what it is worth, as we have been at the top of the range for the last several months, the stochastic oscillator is crossing over in overbought conditions, so we may get a little bit of a pullback. That does not mean that I want to get short of this market. It just means that we are getting a little stretched. A move above the $3.40 level almost certainly would put the $3.50 level in target. A pullback at this point in time should see a certain amount of support near the $3 level.

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