Natural Gas Price Outlook – Natural Gas Continues to See Volatility

Natural Gas Technical Analysis

The natural gas market dropped just a bit in the early hours of Friday, as the market is hanging around the $2.90 level. The 50 day EMA sits just below the $2.80 level and I think that ends up being a major support level based on a popular indicator, of course. Then after that, we have the $2.50 level offering massive support as the 200 day EMA dances right along with it to the upside. The $3.15 level of course is a large barrier that we have seen tested multiple times, so it would not surprise me that if it continues to behave this way it will force some type of squeeze higher as the pressure will finally take over.

It will probably be a very sudden and brutal breakout. Nonetheless, keep in mind that this is the time of year, typically, that is good for natural gas, and therefore, I like the idea of buying dips. I certainly don’t want to short the market in the cold weather and as a result, I think you have to keep in mind that this is a market that you’re looking to find value in, but you also have to recognize that it is driven by weather, and weather in the northeastern part of the United States is very, very difficult to predict, which is why so many people lose so much money trading natural gas with big positions. Position sizing will be crucial as usual.

For a look at all of today’s economic events, check out our economic calendar.