Natural Gas Price Outlook – Natural Gas Continues to Test The $3 Level

Natural Gas Technical Analysis

The natural gas markets have rallied rather significantly during the early hours on Wednesday as we continue to see the $3 level tested. Keep in mind, $3 of course is a large round psychologically significant figure in an area where I anticipate that you will probably have quite a few options traded. So, I think you’ve got a real shot at causing some issues. In fact, it has been somewhat noisy in the past. If we can break above this $3 level though, it does open up the possibility of going all the way to the $3.40 level.

This time of year, is typically very strong for natural gas, so it’s not a huge surprise to see that we are rising again, but quite frankly, I think you need to look at this through the prism of whether or not you are getting value. In other words, I like the idea of buying dips if and when we get that opportunity. At this point in time, I think you have a scenario where traders are going to continue to look at this market through the prism of demand picking up in the next few months across the Northwestern part of the United States.

As long as that’s the case, I do think you have more of an upward trajectory than anything else. Currently, I believe that the $2.40 level is the floor in the trend. If we were to break back down below there, it could change things and make things rather ugly for natural gas bowls.

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