Natural Gas Weekly Outlook – Natural Gas Continues to See Buyers

Natural Gas Weekly Technical Analysis

The natural gas market has rallied rather significantly during the course of the past week, as we have broken above the $3.50 level, and now we are hanging around between $3.50 and $4. This is an area that I do expect to see a little bit of resistance and is going to cause a potential pullback. But we have word of colder temperatures coming to the United States.

So, it has been a little bit of a boost for this market, but we’re getting close to the end of the cold season and therefore, I think you’ve got a situation where traders are looking at perhaps reversing their positions or at least booking gains for the year. The market is likely to continue to see a lot of choppy volatility.

But quite frankly, it is only a matter of about 10 to 12 days before we start trading the April contract and that of course focuses more on spring. As temperatures warm up, at least for the next several months, you’ll see natural gas have a natural proclivity to drop, at least until we get heat waves in the summer. But that’s pretty far out.

So, all things being equal, I am looking for signs of exhaustion to start fading. And I generally look for it on the daily chart. But the weekly chart did show a massive collapse a couple of weeks ago. And now we’re right about in the middle of that. So, this is about where I’d be looking for trouble to take advantage of to the downside.

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