Natural Gas Weekly Price Outlook – Natural Gas Continues to See Upward Pressure for Now

Natural Gas Weekly Technical Analysis

The natural gas markets have broken higher during the course of the trading week to test the $4.40 level. But it is worth noting that Friday is starting to see a little bit of blowback. And that suggests that perhaps we are getting a little overextended again. Keep in mind that the natural gas markets are very cyclical. And we are starting to get kind of close to the idea of spring again. If and when warmer temperatures come, and that should start actually next week, you’ll start to see a drop in demand.

That, of course, isn’t something that should be a surprise. And I think that ends up sending the natural gas market lower. Now, I don’t know if this happens next week. That’s the catch. The change from bullish to bearish is something that takes a while. And therefore, I think you need to pay close attention to your daily charts as well as your short-term charts.

If we break back below the $4 level though, I think that might be the peak for this winter. We’ll just have to wait and see. We are getting ready to roll over into the April contract in a few short days. And that obviously will have its influence felt here as well. So with that being said, I think you have a situation where markets have gotten a little bit extended. And then at this point in time, the markets probably have to correct.

Remember, once you get into spring, demand falls off of a cliff and it really doesn’t pick up until you get heat waves. So, this is a trade I take every year. I buy in the winter, and I sell at the end of it, take my profit and generally stay out of the market most of the year. But there are a couple of nice cyclical trades and we’re getting ready to set up the second one.

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