Natural Gas Price Outlook – Natural Gas Continues to Levitate

Natural Gas Technical Analysis

The natural gas market has shown itself to be somewhat choppy and sideways. At this point in time, we find ourselves at the $3.80 level. This is a market that has been very bullish for several months now, and now that we are rolling over into the December contract, it makes a significant amount of sense that we simply look at this as a long-only type of scenario. After all, the demand for heating is going to jump in the month of December and, of course, only get heavier for the next couple of months.

With that being said, I think this is just a continuation of the overall cyclical trade that is such a big factor here. If we pull back from this area, there is a bit of a gap to fill near the $3.40 level, so we could drop an entire 40 cents at this point and still be bullish. A short-term pullback and a bounce is something that I would really like to see. Maybe $3.60 is an area where you would see that based on previous support and resistance levels.

The $4 level does look very likely to be an area that could cause some psychological resistance as well as market memory. Keep in mind that options traders are pretty heavy in this market, so that has a lot to do with what happens next, also. The 50-day EMA getting ready to cross the 200-day EMA kicks off the so-called golden cross, and if that’s the case, longer-term traders are now starting to look at this beyond the cyclical set up as a potential and viable market.

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