Natural Gas Price Outlook – Are We Getting Close to a Bottom?

Natural Gas Technical Analysis

Natural gas is trying to find its floor. The natural gas market looks as if it gapped a little bit higher to kick off the trading session here on Monday morning. As for where I am, it is 27° Fahrenheit. It would not surprise me at all to see natural gas start to take off to the upside again, but I do think we have a couple of barriers.

Colder temperatures are expected in the United States later this week. It just depends on how long that is projected to be, but we have gotten so low on the chart that I do think a certain amount of value hunting could happen. Friday’s session was a bit of a washout; we had a lot of volume on a major price drop during the day.

Psychological Barriers and Future Outlook

Now I am watching the $3.50 level. I think that is an area that is psychologically important, and if the buyers can get above there, then we will challenge the 200-day EMA, the 50-day EMA, and so on.

The next couple of days should be a little bit warmer here in the United States, but this contract will be looking forward. We are in the time of year where it is typically bullish, and we should get one or two more big rallies at least, I would think, between now and spring. It is worth noting that we burned through a lot less gas than anticipated at the last storage report.

It definitely is trying to find the bottom and turn around, and if it does, in fact, break that $3.50 level, I become interested. I have no interest in shorting it in January, regardless, and definitely not after we dropped the way we did.

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