Natural Gas Price Fundamental Daily Forecast – Early Spike to Upside Changes Trend to Up

Natural gas prices gapped higher on the opening early Monday before spiking to its highest level since September 29. The market ran into resistance inside a technical retracement zone at $3.183 to $3.223, leading to the formation of an intraday high at $3.198.

At 0645 GMT, December Natural Gas futures are trading at $3.138, up 0.025 or +0.80%.

There were no major changes in the weather forecast over the week-end so the early price action was likely fueled by traders taking advantage of thin trading conditions.

According to natgasweather.com, for the period October 23 to October 29, “A weather system will track across the east-central U.S. the next couple days with showers and thunderstorms, but rather mild.”

“A second cooler system will follow on its heels across the Midwest and then East Tue-Wed.”

“The coldest system in the series will arrive late this week through the weekend over the central U.S., gradually pushing eastward while moderating.”

“The western U.S. will be warmer than normal with highs mainly in the 70s to 90s as high pressure dominates.”

“Overall, demand will be low increasing to moderate mid-week.”

Forecast

The early price action suggests we could be in a technically driven market on Monday and maybe throughout the week.

The main range is $3.353 to $3.012. Its 50% to 61.8% retracement zone is $3.183 to $3.223. This zone has provided resistance several times throughout the month. The current price action suggests we could see a strong short-covering rally if buyers can overcome $3.233 on rising volume.

The new short-term range is $3.012 to $3.198. Its retracement zone at $3.105 to $3.083 is an important downside target.

The main trend on the daily chart turned up earlier today so we could see buyers step in on a test of $3.105 to $3.083. They are going to try to form a potentially bullish secondary higher bottom. If successful then look for buyers to take another shot at the upside.

If $3.083 fails as support then look for a possible retest of the main bottom at $3.012.