Natural Gas Price Outlook – Colder Forecast Gets NG Moving

Natural Gas Technical Analysis

The natural gas market has rallied a bit during the early hours on Tuesday after initially gapping lower. This suggests that we are, in fact, starting to see colder weather play a part here.

From a technical analysis standpoint, I am still closely monitoring the 200-day EMA at the $3.62 level. If we can break above there, then I become pretty bullish. I do think this is the time of year you are looking to buy natural gas; you are not looking to sell it. So, with that being the case, you have to be somewhat bullish.

Technical Outlook and Weather Drivers

I also recognize that timing is everything, especially in this market. If we do pull back, then I think it is just continued base building. That is possible, but that 200-day EMA, I think, will kick off a lot of algorithmic traders into the market to the upside. That could open up a move to the $4.00 level.

This time of year tends to be very volatile, but overall, it tends to be more positive because, quite frankly, most of the time it is cold. Pay attention to the weather reports in places like Boston, New York City, and Philadelphia to get a read on where we may go. We are supposed to get really cold weather in the United States northeastern corridor on Sunday and Monday. Whether or not it is enough to sustain it remains to be seen, but as a general rule, I just do not short this market this time of year. There does come a point where we switch over to spring and other late spring contracts, and I just start shorting. We are not there yet.

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