Natural Gas Price Outlook – Natural Gas Continues to See Buyers

Natural Gas Technical Analysis

The natural gas markets have been fairly choppy in the early hours on Friday after that significant breakout to the upside on Thursday. At this point, I think it’s probably an argument of whether or not we need to digest the gains, but it certainly looks like a market that is trying to do everything it can to at least think about breaking higher.

The $3.40 level below was a significant barrier, so breaking above there, of course, is a big deal and in this environment, I think short-term pull banks continue to be buying opportunities. As the temperatures in the United States remain cold, this time of year is one of the best times of year to own the natural gas market.

So, with that being said, I think you have to look at this through the prism of trying to find value on these dips, if and when they occur. Ultimately, I think this is a market that over the longer term, probably tries to go looking toward the $4 level, but I also recognize that it is very noisy from time to time, so you have to be very cautious with your position sizing. Nonetheless, we’ve got some winter left ahead of us, and therefore we should continue to see a lot of upward pressure from time to time. This of course is a market that cannot be shorted easily, as the demand for natural gas will only pick up in the near term.

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