Natural Gas Price Analysis – Natural Gas Continues to Search for a Bottom

Natural Gas Technical Analysis

Natural gas markets have gapped lower to kick off the trading session on Monday as it looks like the $3 level will continue to be a bit of a floor in the market. All things being equal, this is a situation where we will and can continue to see a little bit of dip buying. This is a market that will be very sensitive to the idea of colder weather coming, if and when it shows.

I think you also have to keep in mind that warmer temperatures being forecast into the future in the United States is certainly not going to help this market. I do think we probably have one more shot higher in the winter if history is any type of indicator, but when that is, we just have to wait and see whether or not we get a deep freeze announcement or anything like that. We need to see colder temps to get this market moving again.

Potential Upside Targets

Breaking above the $3.50 level opens up the possibility of a bigger move to the upside as we will challenge the 200-day EMA. With that being said, I don’t have any interest in shorting this market, not this time of year regardless, but also as we are so close to a major bottom. I think it would be rather reckless to try to press the issue here, as the downside is probably somewhat limited at this level.

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