Natural Gas Price Outlook – Natural Gas Sees Selling on Monday

Natural Gas Technical Analysis

The natural gas markets plummeted a bit during the early hours on Monday, breaking well below the $3 level, and at this point, I think we are trying to do whatever we can to find some type of support. While I recognize this is a pretty negative candlestick, it doesn’t necessarily mean that it’s the end of the world here for Nat Gas. I do believe that you have to look at the $3 level as a lot of psychology is coming into the market. For what it is worth, the moving average convergence divergence indicator does show a little bit of hesitation.

But we are in that time of year where natural gas is a little bit more in demand than it is in other times. The hurricane recently caused a major surge in natural gas prices, but really at this point, it comes down to backing and filling. With this, I look at this as a situation where we are trying to build up the necessary base, if you will, to take off to the upside.

If and when we do, it opens up a move to the $3.50 level. Having said all of that, natural gas is not a market I like to get heavily levered in, and it’s just one trade of many that I do every year based on cycles. We are in a cyclically bullish time of year for natural gas, so I do expect it to go higher, but it’s not a huge position for me, nor should it be for you. Natural gas can cause major damage to your account if you’re on the wrong side of it.

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