Natural Gas Price Outlook – Natural Gas Continues to Consolidate

Natural Gas Technical Analysis

The natural gas market has rallied slightly during the early hours on Friday as we continue to consolidate overall. Ultimately, this is a market that I think is going to pay close attention to the $4.60 level, as it has been a bit of a barrier. But even if we break above there, I think we’ve got other levels that we will be watching. Most notably, of course, will be at the $5 level. Short-term pullbacks could see buying pressure near the $4.20 level and then the $4 level.

All things being equal, this is a market that has a lot of momentum behind it as we jumped into the December contract. That, of course, does suggest that there will be more demand out there. I think the 50-day EMA sitting right around the $3.80 level would be an ideal entry point, but unfortunately, I don’t know if we’re going to get it. We do need to see cheaper pricing. You don’t want to chase the market at these high levels.

Hopefully, volume will drift off, or perhaps traders will focus on the fact that it’s not exactly deadly cold in the United States yet. But as things stand right now, it’s a long-only market, and it will be that way for several months. You just don’t short natural gas in the middle of winter. It just doesn’t make any sense. So with that being said, I’m patiently waiting for the pullback that may or may not come. And if you’re not involved, you don’t want to chase. Simply put, if that pullback doesn’t come, just let the market go.

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