Natural Gas Price Outlook – Natural Gas Plunges on Tuesday

Natural Gas Technical Analysis

The natural gas markets have dropped pretty significantly in pre-market trading, losing 3.76% at the time of recording, as it looks like we are going to plunge towards the $3.50 level. This is an area that previously had been resistant, and it now should be supported. It’d be interesting to see if that does hold though because we have the 50 day EMA in that same neighborhood. If we were to break down below the $3.50 level, then we could go down to the $3.20 level. If that were to happen, then I think you start to look at the possibility that the winter rally is over.

Keep in mind there are whispers from meteorologists expecting warmer temperatures in February than usual and that would probably end the winter rally completely. Now having said that, if we do get another storm, and experience tells me we probably will between now and the end of winter, that might be one more last hurrah for the natural gas markets before we sell off again.

Natural gas is abundant, it is not hard to find, and really it is because of that, we will continue to see natural gas have somewhat of a ceiling above it. And therefore, I don’t get bullish about this market, unless we are in the dead of winter, and we are rapidly leaving that. In fact, we will be rolling over into the next contract in the next day or two, which of course is the month of March.

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