Natural Gas Price Analysis – Natural Gas Sits at Hard Floor

Natural Gas Technical Analysis

The natural gas market continues to see the $3 level offering significant support. The $3 level is an area that a lot of people would be watching closely, as it is a large, round, psychologically significant figure, and a lot of options traders are probably sitting just below there. This is a market that I think, given enough time, we probably bounce a bit, given the fact that we are still very much in winter and there are still cold temperatures out there.

Market Outlook and Key Levels

I think the next pop higher is probably the last one. The $3.50 level above is your initial target, followed by the 200-day EMA. If we were to break down below the $3 level, then it is possible that we could go down to the $2.75 level, and area that has been important before.

Ultimately, this is a market that I think continues to see a lot of choppiness. I think there are a lot of questions as to whether or not the cold temperatures were enough to drive down supply from a longer-term standpoint, and the hint, of course, is no, it is not. But we will get that little bit of a bounce at the next major cold snap, and then I start to look to short natural gas if it gets a little too far ahead of itself. If you are trading spot natural gas, it is probably higher, but this is what we expect prices to be later in March, as it is the futures contract.

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