Natural Gas Technical Analysis
The market gapped lower to kick off the Friday session, as we are basically hanging around trying to figure out what to do next.
We have seen a nice shot higher in natural gas, and ultimately this is a market that I think is starting to roll over into colder-weather contracts. In fact, we are rolling over on Monday into the November contract, so I suspect we might want to ignore today’s price action and recognize that we are starting to enter a regime where colder temperatures are coming.
Support Levels and November Uncertainty
The dips might be attractive for those looking to take advantage of value. In fact, it is somewhat cold this morning in the United States, and the dips might be attractive for those looking to take advantage of value. I find this to be a seasonal trade every year. I do buy natural gas, although I do not do it in the futures market; I do it via an ETF. However, a small enough position and simply hanging on to it for a couple of months does add a few percent to my return every year.
The $3 level in the futures market is one to watch. We will have to see how November opens up, but it will be interesting to see how that plays out and whether or not it holds as support. As things stand right now, the $2.80 level is still the absolute floor of support.
We have hit the target based on the consolidation and the breakout of the rectangle. Now, it is a matter of trying to find value before buying.
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