Natural Weekly Price Outlook – Natural Gas Continues to See Buyers

Natural Gas Weekly Technical Analysis

Natural gas markets had a strong week again, as we are now back above the $4 level, which of course is a very bullish sign. As things stand right now, I think you have a situation where you continue to buy the dips, but I would expect a certain amount of noise right around this region. With this, the pullbacks should attract value hunting, and I would think that we probably have one, maybe two more rallies between now and the end of winter that could really push Nat Gas higher.

The $5 level would be my target if things get really good, but right now I’m more apt to look for those dips, take advantage of them and then get out again because once the market starts to focus on the spring and the warmer temperatures in the United States, natural gas does tend to plummet. So, you have to be very cautious. It was worth noting that we gave up a lot of the gains from the previous week and then turned around and crashed. So, I do think there is a lot of supply that has to be chewed through above, but temperatures in the United States are very cold at the moment and they are projected to be cold again next week.

So that’s part of what we are seeing here. Furthermore, you have to keep in mind that the Europeans will be importing natural gas from the United States due to what they’ve done to their own natural gas infrastructure. So, with that being the case, I am positive and bullish on this market, but I also realize we are getting kind of close to the cycle end for cold weather. Remember, it’s a futures market, the drive is, and therefore, will have an outsized effect once futures traders really start to focus on warmer months.

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