Natural Gas Price Analysis – Natural Gas Sits at Major Floor

Natural Gas Technical Analysis

The natural gas markets are pretty quiet in early trading on Tuesday as participants just don’t really seem to have a whole lot to go on at the moment, with many traders out there doing what they can to sort out where natural gas might be going. The $3 level looks to be a bit of a hard floor in the market, and I think with this being the case, you have to watch whether or not we can stay above $3. If we can then eventually, I do think we take off to the upside because there should be another cold blast or 2 in the United States between now and the end of winter.

A Cyclical Market Outlook

If and when that happens, I wouldn’t expect to jump all the way back to the recent highs; that was out of control, wild, and one should start to see more extraction of natural gas out of the ground now that we are no longer frozen. With everything being said right now about the market, I think the one thing that you need to keep in the back of your mind is that it is a very cyclical market and therefore, you have to understand that traders will tend to buy it in the winter and tend to short i,t with the exception of very hot times of year in the summer.

I’m looking for a reason to go long. I certainly wouldn’t go short at these extraordinarily low levels. I’d like to see one more pop higher. I will take advantage of that. If we clear $3.50, I think we could go quite a bit higher, maybe $4.50 before it’s all said and done, but then I start to look at shorting again. I have no interest in shorting this early in the year.

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