Natural Gas Price Outlook – Natural Gas Continues to See Buyers

Natural Gas Technical Analysis

The Natural gas markets have rallied a bit in the early hours of Tuesday trading as we are now breaking above the 200 day EMA. Quite frankly, this is a market that is very seasonal, so it’s not a huge surprise to see that the November contract is behaving well. And at this point in time, we start to price in the idea of cooler temperatures in places like the United States and Europe. More demand will mean higher prices. shortly, we should see quite a bit of upward pressure, and we are starting to see the beginning of it, but this isn’t a straight shot higher.

This is a market that will have occasional pullbacks, but those pullbacks at this point in time look like buying opportunities to me as I switch from bearish to bullish. It looks like we put in a little bit of a double bottom. Artistically speaking, that is, it’s not a perfect double bottom, but close enough. And now we’re ready to take it off to the upside. Where do we end up? I don’t know, but I would say eventually we’re probably going to test the $4 level, that’s quite typical in this market.

It is a volatile market, so do keep that in mind and it does move back and forth in the latest weather report. So, you do have to be somewhat cautious. But ultimately, I think you’ve got a scenario where it’s only a matter of time before we continue the upward trend. The $3.60 level is an area that could be a little bit noisy. And then the $3.80 level followed by that $4 level. Anything above there could really start to increase the pressure and maybe even send this market looking to the $4.80 level, which has not been seen since the very, very end of last winter.

It wouldn’t be a huge surprise. And with Europe signing a massive energy deal with the United States, that also could come into play as well. So, with things being equal, I think we’ve probably put the bottom in and now we start the grind higher for the winter months. Short-term pullbacks continue to be my trigger to get involved.

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