Natural Weekly Price Forecast – Natural Gas Continues to See $3 as Important

Natural Gas Weekly Technical Analysis

The Natural Gas markets initially tried to rally during the course of the week, but it seems like we have a lot of resistance at the psychologically important $3 level.

This does make a certain amount of sense from both a technical analysis standpoint and a fundamental one due to the fact that there is a heat wave coming to the United States, but that’s already been priced into the markets. I can assure you that a couple of days of a heat index of about, if my math is correct, 39 Celsius is not going to change the world here.

So, with that, I do believe that the market probably falls from here. Now, having said that, I also believe that we are in the midst of a massive consolidation phase. And this time of year, typically isn’t very bullish for natural gas unless of course we get a heat wave. I have been involved in this market via an ETF so I don’t have to worry about leverage. I’ve collected some profit along the way, still have a position on, and fully recognize that we are going to pull back and I’m willing to add to that position later.

If you are a CFD trader, and I suspect most of you are, make sure to keep your position size reasonable. Natural gas is a market that runs mainly, but not exclusively on weather patterns in the Northeastern part of the United States. If we get some type of geopolitical situation, then that of course can have an effect as well. We also sometimes will get peripheral noise like Dutch natural gas jumping 13% in a day, but Nat Gas has to get pretty expensive for Europeans to start importing wholesale from the United States, which is what this contract is based on. So, at this point, I think we get a bit of a correction. Somewhere below $2.40, I’d be very interested in buying again. The alternate scenario would be we break $3.50, which could kick off a big melt up, but I just don’t see it.

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