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

Natural Gas Technical Analysis

Natural gas lost over 5% in the early hours on Wednesday, as it looks like a bit of profit taking has hit this market. That does make a certain amount of sense considering that the $3.40 level has been like a brick wall multiple times and we got there far too quickly for a sustainable move. The question now is whether or not the buyers will return, and I think the answer is yes, they will, eventually.

We probably would be better off looking for buying opportunities closer to the $3 level which would have a lot of options protection, at least I would anticipate this. And of course, there’s a certain amount of psychology to that large figure anyway. We are still very much in the midst of high demand coming over the next couple of months in the United States for natural gas.

And as a result, I do think you have a situation where prices will eventually break that crucial $3.40 level, but we may have to spend some time trying to build up the necessary momentum. All things being equal, I don’t have any interest in trying to short the market this time of year. It’s far too early in the winter season to think of these things. Natural gas of course is very volatile and therefore you need to be cautious with your position sizing. As I say all the time this is a market that can be played, but you have to keep your position sizing under control.

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