Natural Gas Price Analysis – Natural Gas Continues to Elevate

Natural Gas Technical Analysis

The natural gas market is about 5% lower than it opened on Tuesday as we continue to grind back and forth. I think this makes a certain amount of sense due to the fact that there is still a massive snowstorm and ice storm all over the eastern part of the United States, and of course, in this type of environment, natural gas is not being extracted. Most of the fields are quite frankly frozen at the moment, so that does have a major influence on supply.

Technical Outlook and Strategy

That being said, this is a market that I think, if it does pull back, we could find buyers trying to take advantage of cheap natural gas, although temperatures will eventually rise, and the demand could drop, especially as drillers get back to work.

The reality is, we are still in a very positive time of year. I’m not looking to short this market, I don’t do it this time of year, but I also recognize that we are far too overextended at this point in tim,e and it’s likely going to be a situation where traders have to determine whether or not they are finding enough value at a specific price to actually put their money at risk.

I just can’t imagine buying all the way up here. So, with that being the case, this is a temporary phenomenon. Once it starts falling, it will probably drop 10% pretty quickly. At that point in time, we’ll start to pay attention to $5.50, $5.00, $4.50, and so on, as it is a very technically driven market. I’m looking for a drop and a bounce that I can take advantage of.

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