Natural Gas Forecast December 10, 2012, Technical Analysis

The natural gas markets fell during the session on Friday but still remain above the vital $3.50 level. Because of this, we still do see support but recognize that a move below the $3.50 level would of course trigger more selling. This would simply be reentering a new consolidation area down to the $3.20 level, and could see a move lower of $0.30 over the next several sessions.

Based upon the longer-term charts, especially the weekly, we think that this market is in fact going to start falling again. However, we don’t necessarily think that we’re looking at a major meltdown, to simply a gradual decline as the weather has been warmer than usual in the northeastern United States, one of the largest consumers of natural gas in the world.