Natural Gas Price Outlook – Natural Gas Bounces Slightly in Early Trading

Natural Gas Technical Analysis

The natural gas market has shown itself to be a little bit negative in the early hours here on Friday, only to turn around and bounce slightly. When you look at the chart, we have filled the gap from the move to the upside when we rolled over into the November contract. We have dropped back to filling that gap, so it’ll be interesting to see how this market behaves here because we could very well see technical traders come in and pick up natural gas.

Quite frankly, natural gas is a market that’s very tough to deal with at times, but demand is going to be picking up fairly soon. And if that’s going to be the case, especially as we are going to be rolling over into the December contract on the 29th of October, which is just about 10 days from now, then you start to talk about the coldest parts of the winter, and the demand should really pick up quite nicely. I think it’s oversold. A bounce makes a certain amount of sense. Part of what you’re seeing here is a reaction to the idea that the economy might slow down, and if it does slow down, that leads to less demand for energy.

I don’t necessarily read too much into this chart other than the market is still respecting the longer-term trend line. We have structurally at least made a higher high, a higher low, and another higher high. And now it looks like we’re trying to make a higher low. So, it’ll be interesting to see how this plays out. I do think there’s a real shot at natural gas bouncing somewhere in this area. Although it wouldn’t hurt to wait till next week. Why sit through the weekend, wondering when on Monday we should see plenty of momentum?

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