Natural Gas Price Forecast – Natural Gas Continues to Test Support

Christopher Lewis
Published: May 29, 2024, 14:08 GMT+00:00

The natural gas markets continue to pay close attention to the $2.50 level. This is a market that has been a bit overdone, and a pullback is likely. This could end up being a great buying opportunity if you are patient enough to take it.

In this article:

Natural Gas Technical Analysis

At this point, it looks like natural gas is trying to test the $2.50 level, an area that of course is widely followed as a large round psychologically significant figure. But I also think it is probably worth noting that we have tested it a couple of times in the past.

Those of you who are looking at the chart as I record this video probably recognize that a little bit of a complex head and shoulders pattern is starting to show itself. So, for example, we could see about a 40 cent drop if we break through the 2,50 level. I think that’s very reasonable. That could put us somewhere around 2,10, which would be a nice buying opportunity.

Those of you who have been following me for a while know that I own this as an ETF, not levered, and I have profited on the way up. I didn’t catch the top of the move. I’m not going to try to pretend like I did. This is a cyclical trade for me. It’s been very hot in America, at least due to what you would consider normal this time of year. And I think that’s been the main driver. Temperatures have dropped, so it’s probably only a matter of time before we fall again.

I do think though, this could be a nice buying opportunity on a washout, but you need to keep your leverage down because the leverage is what will kill you between now and either the next heat wave or fall in North America. So, it’s a game of patience. It’s an investment, not a trade. But I do think that if we break down here, your ears should perk up.

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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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