Natural Gas Price Outlook – Natural Gas Continues to Bounce on Thursday

Natural Gas Technical Analysis

The natural gas market has gapped to the upside during the trading session here on Thursday, as it looks like we are in fact trying to recover from that $4 level that was mentioned. All things being equal, this is a situation where traders will continue to look at the $4 level as an area of importance.

Seasonal Strength and Technical Support

The market is now challenging the 50-day EMA, and it is probably worth noting that temperatures are expected to drop a bit in the United States, thereby driving up demand. There is no interest whatsoever in shorting this market, and at this point in time, the 200-day EMA at the $3.60 level is also an area of support.

With this being the bullish time of year that it is, and the market seeing support just below, this is viewed as a fairly strong signal that natural gas may try to recover. That does not mean it reaches $5.50 like it did previously, but buyers do appear to be starting to come back, as it makes a certain amount of sense to own this asset this time of year.

There is no interest in shorting, but it is recognized that once springtime contracts arrive, an excellent shorting opportunity can emerge. This is a cyclical approach, and these types of moves can be quite massive, but patience is required while waiting for them to set up. As things stand right now, it looks like that setup has finally shown up after the explosive move to the upside.

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