Natural Gas Price Outlook – Natural Gas Continues to See Volatility

Natural Gas Technical Analysis

The natural gas markets bounced ever so slightly in the early hours on Thursday with the $3 level underneath offering a support region. The $3 level has previously been resistance. And of course, the large round psychologically significant $3 level probably has quite a bit of options trading as well. So, it all comes together quite nicely. All things being equal, this is a market that is going to have to pay attention to demand in the United States, which should be picking up as we head into the colder part of the year.

Above, we have the $3.40 level offering significant resistance, as it has been very resistant multiple times. If we can break above there, then I think the market really starts to take off. At that point, we could go to look at the $3.80 level. In general, this is a market that I think continues to see a lot of volatility.

This is typical at times for this market, and I think you’ve got a scenario where you need to be very cautious with your position sizing, but you still have to favor the upside, even if we do fall from here. It’s really not until we break down below the $2.50 level that I think you have to worry about the overall trend. And this time of year, it’s just cyclically positive for natural gas. So, I don’t have any interest in shorting it anyway.

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