Natural Gas Price Outlook – Natural Gas Continues to Elevate

The natural gas market has rallied a bit during the early hours on Monday, and at this point in time, it looks like we are trying to break out to the upside, but quite frankly, we have a situation where we see quite a bit of volatility and choppiness, which makes sense considering that we shot straight up in the air.

Key Resistance and Seasonal Factors

The $4.75 level is a bit of a barrier that I think is going to be difficult to break above. And really at this point, I think that is your ceiling for a short-term pullback. I think we could test the $4.25 level, but we could even break down below there. That’s your short-term support. A drop to the $4 level would be preferable because, really, at this point in time, what you’re looking for is the natural gas market to offer a bit of value. It’s difficult to chase a market that has done this. And with that being the case, the 50-day EMA is also worth paying close attention to, which is closer to the $3.85 level.

All things being equal, this is a market that is going to be bullish this time of year as we are trading the December contract, which, of course, features a month that is typically has higher demand for natural gas and colder temperatures. As that is the case in both the United States and Europe, those are two of the biggest consumers.

This time of year, I have no interest in shorting, and I look at dips as buying opportunities. Really, how far we dip from here and whether or not you buy will come down to whether or not it is a short-term trade or a longer-term trade. Short-term traders will probably continue to jump in and buy dips on a day-to-day basis, while the swing traders will be looking for deeper corrections.

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