Natural Gas Price Outlook – Natural Gas Continues to See Buyers

Natural Gas Technical Analysis

Natural gas finds itself gapping higher to kick off the trading week and break above the 50-day EMA. The $3.20 level is being targeted, and this, of course, I think could be broken to the upside and go looking to the $3.53 level. This is a massive 5 % jump, but really, at this point in time, I think you have also to understand that this time of year, natural gas does typically get stronger. After all, temperatures will be falling in the United States and Northern Europe, and that means more demand.

The idea that perhaps we would fall significantly this time of year is just a hard thing for me to fathom, and it is worth noting that there is a major uptrend line that we are in the middle of defending, also the $3 level, I think, continues to be significant support. And now that we’ve gapped like this, I think the idea is to buy any dip that bounces because it shows you that people are getting involved and trying to find a little bit of value in a market that is jumping to the upside.

I have no interest in shorting this market. And it is worth noting that even if we fell precipitously from here, the trend line at $2.80 really offers a hard floor here. So, I’m a buyer. I do think that we eventually grind towards $4. I don’t think it happens overnight, but this is a cyclical trade that I take every year.

For a look at all of today’s economic events, check out our economic calendar.