Natural Gas Price Analysis – Natural Gas Jumps Early on Thursday

Natural Gas (NG1!) Technical Analysis

The natural gas market is up 2% pretty quickly on Thursday morning as we continue to see the market try to recover from an extraordinarily low level. The $3.00 level of the course will continue to attract attention as it is a large, round, psychologically significant figure and an area that showed quite a bit of support in the past. Ultimately, this is a market that is more or less buy on the dips, although I am not looking for anything explosive to the upside, at least not yet.

Seasonal Contract Transitions and Technical Support

Given enough time, we will probably have another cold snap in the United States between now and the end of the year, which could make prices jump. But we are getting pretty close to rolling over into the April contract here in about 2 weeks and then you start to think more along the lines of winter. Supply seems to be pretty strong right now, so I still think any rally on a buy on a dip opportunity is probably short-term. I would not be looking for longer-term moves at this point.

If we do get a spike higher, my first initial thought is that at the first signs of exhaustion, I am going to start shorting because of the fact that we are rolling over into the time of year where natural gas really starts to struggle. If we break down below $3.00, we could go looking to the $2.75 level, but it appears that is less likely, as we have seen so much pushback in this general vicinity.

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