Natural Gas Price Outlook – Natural Gas Bounces Again on Wednesday

Natural Gas Technical Analysis

The natural gas market has rallied during the early trading hours as it looks like we are trying to get to the $4.50 level. The market pulling back at this juncture probably offers value, and I do think that, given enough time, we have a situation where we do have to pull back and offer a bit of value in a market that has been very bullish and hard to chase.

I really don’t like the idea of chasing natural gas all the way up here, although I certainly wouldn’t short natural gas this time of year, mainly due to the fact that the demand will pick up as we go forward. This is the December contract, and we’re getting ready to roll over into the January contract here in about eight days or so. And with that being the case, that will give it more momentum. I really want to see a pullback closer to the $4 level to find some value before I start risking money in a market that’s been up about 35% or something for the past month.

Yes, it should be positive. Yes, it should be bullish, but that doesn’t mean I have to buy the top. The $5 level will be the target eventually, but again, I need to see a little bit more give back to start risking my trading capital. After all, there are other markets to trade in the world, and therefore, it isn’t advisable to chase this momentum-driven move.

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