Natural Gas Price Forecast – Rally on Cold Weather ForecastsNatural gas markets gapped higher to kick off the trading session on Tuesday, and then shot towards the $2.95 level. The $3.00 level above can offer resistance.
Natural gas markets have gapped higher to kick off the trading session on Tuesday, reaching towards the $2.95 level. This is based upon colder than temperatures coming in the United States, which of course will drive up massive amounts of demand in this market. That makes quite a bit of sense, because quite frankly the market is very cyclical, and it makes quite a bit of sense that the traders out there would be bidding up the price of the commodity.
NATGAS Video 21.10.20
If we can break above the $3.00 level, the market is very likely to go much higher, perhaps reaching towards the $3.25 level next. After all, this market does tend to rally this time year every year, and as long as we have a “real winter” in the United States, it is very likely that we have further demand. Beyond that, we have seen a lot of bankruptcies during the year, as natural gas has been oversupplied for some time.
75% of retail CFD investors lose money
All of that being said, that does not mean that we break out to the upside right away. The market more than likely will have the occasional pullback, perhaps down towards the $2.60 level where the 50 day EMA is reaching towards. All things being equal, you certainly cannot short this market anytime soon, so looking at pullbacks as potential buying opportunities makes the most sense. At this point, I am either buying a breakout above the $3.00 level, or buying a pullback, perhaps closer to the $2.65 region.
For a look at all of today’s economic events, check out our economic calendar.