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Natural Gas Price Forecast – Natural Gas Markets Continue to See a Basing Pattern

By:
Christopher Lewis
Published: Feb 29, 2024, 15:01 UTC

Natural gas markets have dipped slightly during the early hours on Thursday, but still have plenty of noise underneath that could offer quite a bit of support. Keep in mind, we are at extreme oversold conditions.

In this article:

Natural Gas Technical Analysis

You can see we initially tried to rally during the trading session here on Thursday but pulled back from the 20 day EMA. In general, this looks like a market that is trying to form some type of, uh, kind of, uh, base. And therefore, I think you’ve got to look at this through the prism of, “are we going to end up forming enough support to turn things around?” When you look at the longer term charts in this pair, it’s obvious that the $1.50 level underneath is massive support and a major area of interest.

So, I do think that we’re getting close to some type of turnaround. Whether or not it happens quickly or not is the real question at this point. Ultimately, I like the idea of buying natural gas for an investment, but I certainly wouldn’t do it with any leverage. This calls for something like an ETF, or possibly a CFD position, but make sure you understand the financing and of course, position science accordingly.

You don’t want to jump all in on natural gas. It’s got a long way to go before it convinces everybody that it wants to go higher. And of course, we are heading into a traditionally quiet time of year. What you need is some type of massive winter storm or drillers to simply walk away. And they will do that at these prices. So probably only a matter of time before we see a turnaround.

Ultimately though, if we were to break down below $1.50, then I get really interested from a long-term standpoint. If we break above $2, then I think we’ve got the possibility of some momentum trading, picking up as short covering would increase. If that’s going to be the case, the market is likely to see a lot of “FOMO trading” picking things up, perhaps sending natural gas higher in a very quick manner. All things being equal, I think we continue to look at this through the prism of perhaps a longer-term possibility.

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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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