Natural Forecast – Natural Gas Continues to Build a Base

Natural Gas Technical Analysis

Natural gas initially fell during the trading session on Monday, but it does look like we are trying to turn around and bounce a bit. Ultimately, the $1.50 level underneath, I think, continues to be a major floor in the market that you need to pay attention to. And of course, we have the 20 day EMA above offering a little bit of resistance that people will be watching as well. Ultimately, I think this is a scenario that eventually we do rally, probably to the $2 level initially. There is a major floor at $1.50 going back multiple years, and an area that has a lot of drillers thinking about bankruptcy and walking away from the fields. This could bring down supply, eventually. However, it could take time for that to show up in the price charts.

So, I do think that if you are looking for an investment, this might be a decent market to be involved in. But I would put an accent on the word investment due to the fact that it is not going to move quickly, and you may see quite a bit of volatility. The last thing you want to do is have a massive amount of leverage in this position as it can jump back and forth. In general, I think this is a situation where if you can find low leverage or an ETF like I trade, then it’s a nice investment for probably the rest of the year. You will have the occasional shakeout, but if we can break above the $2 level, then we could start to pick up momentum to $2.50.

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