Natural Gas Price Analysis – Natural Gas Rises to Challenge Big Number

Natural Gas Technical Analysis

The natural gas markets have risen slightly during the early hours on Thursday as we are taking on the $3.50 barrier. We still have the 200-day and the 50-day EMA both above, but I think given enough time we will continue to bounce slightly.

A Seasonal Bid with Warming Forecasts

This is a time of year that typically we do get a bit of a bid, but we also have warmer than usual temperatures forecast for huge parts of the country right now. Therefore, Americans won’t be drawing down as much on natural gas as they have been over the last couple of weeks.

It will be interesting to see how this plays out because typically we have one more bump for the winter and then we start to think about shorting natural gas as demand will drop for the next several months. With that being said, I like the idea of perhaps buying small positions, but I would not get overly aggressive here.

I think you may have a tough week or 2 as we try to find some type of reason to get bullish. Remember, natural gas isn’t exactly a rare commodity by any stretch of the imagination in America or Canada. Therefore, it has a major influence on dampening the price of the Henry Hub natural gas contract.

The $3 level looks to be a major floor, so I don’t really think we break down below there. If we did, that would be a very ugly sign. I do believe that we will bounce again; I just think you’d have to be very patient and therefore you would need a relatively small position.

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