Natural Gas Price Forecast – Natural Gas Continues to Build Up

Natural Gas Technical Analysis

Natural gas continues to rally a bit, and it certainly looks as if it is trying to break above the 50 day EMA. That being said, I think natural gas has a lot of work to do, and we are just simply bouncing around in a consolidation area, which I think given enough time will be looked at as an accumulation phase. With that being said, you do have to be very careful with the natural gas. It is a negative commodity at the moment. There’s just no real momentum except for the last couple of days.

But if we were to break above the $2 level, that could bring in a lot of momentum and a lot of FOMO trading as it were. Short-term pullbacks are still buying opportunities as far as I can see, but I don’t do it with leverage. I do it with an ETF. That way I don’t have to worry about being overexposed, but I can also take advantage of higher prices later this year.

The seasonality trade of course is negative for Nat Gas right now. So that’s also something to keep in the back of your mind. But underneath at the $1.50 level, there’s a massive amount of historical support. And that does make a certain amount of sense considering that drillers underneath there really don’t make much money if any at all. And they will simply walk away from the wells.

With that being said, I think we probably have several months of churning, but ultimately, this is a market that will return to historical norms, probably a little closer to $2.50, maybe even $3 later this year. At that point, I will sell my ETF positions and there, I just simply step away from the market until we get a clear setup. As things stand right now, it looks like we are forming a little bit of a double bottom, which is a good sign, but I also believe that we pull back again. So, I think that gets negated and we just continue to consolidate between $1.50 and $2.00.

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