Natural Weekly Price Outlook – Tough Week for Natural Gas

Natural Gas Weekly Technical Analysis

The natural gas market shot higher during the course of the week. And Friday now finds itself filling the gap from the massive shot higher on Monday. The question now is whether or not we can hang on to these gains. Temperatures are colder in the United States, and we are starting to see more snow. So the theory of course is that traders will be paying close attention to the weather patterns in the Northeastern part of the U.S. as per usual.

That being said, we also have to come to grips with the fact that the futures markets will very quickly be looking towards the spring season, although they aren’t there yet. And that will have a knock-on effect in the spot natural gas market.

From the technical stance, you have to look at this and recognize that this candlestick could be thought of as an exhaustion candlestick. So, a little bit of a pullback could be coming. If we were to break down from here, I believe that the $3.40 level should offer support because if it doesn’t, that might be the beginning of the end. I think the next week or two will be crucial for natural gas markets because of this.

On the other hand, if we were to turn around and recapture the $4 level, then I think we’d probably go higher again. I believe that we have one, maybe two more rallies possible in the natural gas markets before warmer temperatures start to take focus. The recent run-up has been rather strong, but to be honest, it’s really not a whole lot out of the ordinary when it comes to this time of year, and I think it’s just simple weather patterns playing out in the cyclical trade. As things stand right now, the next candlestick could give us a huge heads up as to where we end up over the next 30 days.

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