Natural Gas Price Forecast – Natural Gas Continues to Build a Basing Pattern

Christopher Lewis
Published: Feb 28, 2024, 16:03 UTC

Natural gas markets have rallied slightly during the early hours on Wednesday, as we continue to build a bit of a basing pattern in a market that is obviously oversold.

In this article:

Natural Gas Technical Analysis

Taking a look at the natural gas markets and we rallied just a bit during the trading session on Wednesday which probably isn’t a huge surprise. You have to assume that natural gas will put up a little bit of a fight at these extreme lows.

After all the $1.50 level underneath is a major floor in the market on the longer term chart and sooner or later you have to wonder whether or not the market will be able to sustain this type of pricing. Quite frankly, drillers will step away from the fields and therefore one would think that there would be no point whatsoever in being involved in natural gas from a production standpoint. The $2 level above is a major psychological and structural barrier and if we can break above that then I think we have a real shot at going higher.

That being said, I think it’s going to take some work and I do recognize this time of year is typically not the greatest for natural gas overall so do keep that in mind. I think you’ve got a situation where traders will continue to look at this through the prism of whether or not they believe that the worst is behind them, whether or not they think it is value. Probably two things that you really need to pay quite a bit of attention to.

Short-term pullbacks I do think offer buying opportunities but only if you’re willing to sit through what could be a really difficult couple of months. If you’re a short-term trader, you might be able to range trade this with some type of scalping system but I would not expect much more than that. When you look at longer-term charts we are most certainly at an extreme low and I do think that there’s going to be some value hunting but there’s probably quite frankly a certain amount of short covering out there waiting to happen as well so do keep that in mind. I think we get some volatility but if you keep your leverage down it might be a swing trade position.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

Did you find this article useful?