Natural Gas Price Outlook – Natural Gas Bounces in Early Trading

Natural Gas Technical Analysis

The natural gas market has rallied a bit during the early hours of Thursday as it looks like the $3 level is going to continue to offer a bit of support. That does make a certain amount of sense because the $3 level, of course, is a large, round, psychologically significant figure and an area that has been tested multiple times over the last eight or nine months. We are at the weakest time of year for natural gas. But the reality is that Europeans are importing US gas instead of getting it directly from Russia, and that does have an effect on the market.

In other words, it keeps somewhat of a bid in natural gas. There’s also the argument to be made that natural gas will have more demand due to artificial intelligence and heavier demand for electricity. But I don’t know if that is the main driver at the moment. I think it’s more or less just a market that has found an area of interest and we are going to see a little bit of a bounce.

This bounce is something that I will be selling into, but I need to see signs of exhaustion on a daily candlestick. I would love the market to reach the $3.50 level again to start shorting, but we’ll just have to wait and see. If you are a short term trader, you can make an argument to play the bounce and buy natural gas. But I understand that you need to be thinking along the lines of taking your profits rather quickly because this time of year, there’s just a serious lack of demand.

There’s no heating demand. And there’s also talk of some countries slowing down. So that wears down some of the demand as well. With this, a short-term bounce is likely, but I’m still looking for selling opportunities. If we were to break down below the $2.90 level, then I think the bottom falls out.

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