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Natural Gas Price Forecast – Natural Gas Continues to Test $2.50

By:
Christopher Lewis
Published: May 28, 2024, 13:44 GMT+00:00

The natural gas markets continue to test the $2.50 level, an area that has been important several times. If the market continues to pay attention to this area, I think you have a real shot at a bigger move that should be watched closely.

In this article:

Natural Gas Technical Analysis

The natural gas markets have tried to rally a bit during the trading session on Tuesday, but the $2.50 level is an area where I think we are going to see a lot of volatility. It is a short-term support level. The question is, does it hold?

If we break down below there, I think it just offers value that people will be looking to take advantage of. But you need to be very cautious with your leverage. After all, for myself, I’m involved in an ETF that isn’t levered, and I have actually taken a bit of profit on the way up. It’s a longer-term investment, and that’s the key word here, an investment for me.

I don’t look at it as a trade and I don’t want it to be a short-term trade. Quite frankly, natural gas is almost impossible to trade in the short-term because it’s so heavily influenced by weather patterns. Nonetheless, if we do break down from here, then I’ll be looking to add to my ETF position somewhere near the $2.15 level. I also understand that it will be a situation where we will eventually get higher prices due to geopolitics or perhaps just colder temperatures or even before then maybe hotter temperatures are coming.

We have had rather hot weather in the United States over the last couple of weeks, so that’s part of what drove this higher, but we also have concerns about European supply yet again. So, with that being the case and the fact that we are forming a rather obvious head and shoulders, I do think that we get the pullback that we can take advantage of being given enough time. If we break down below the $2.50 level, that will be the first sign that we may go looking for value underneath.

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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.

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