Natural Gas Price Outlook – Natural Gas Fills a Gap

Natural Gas Technical Analysis

The natural gas markets fell a bit during the early hours on Tuesday to reach the $3 level but at this point in time it looks like we are going to be done filling the gaps. So it’ll be interesting to see whether or not we can get a little bit of a balance in order to start going long. At this juncture, I think you’ve got a situation where somewhere between $3 and $2.88 in the area where a lot of buyers probably get involved.

If we turn around and take on to the upside, then it’s likely that the $3.40 level above will be targeted. It might take some time to get there, but keep in mind that we are in the midst of a cold season in the United States, which obviously will have a major influence on demand for heating. Natural gas of course has a lot of geopolitical factors at the moment, so really at this point I think you have to look at this as a market that is willing to take advantage of dips in order to pick up cheap gas. I don’t have any interest in shorting.

But really at this point, if we were to break down below the 50 day EMA, then I would probably step back and let the dust settle. If we can break above the $3.40 level, then it’s very possible that natural gas goes looking to the $4 level over the next several weeks. But really, it’s a situation where I think you’re looking at more short-term buy on the dip type of trading.

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