Natural Gas Price Outlook – Natural Gas Continues to Show Strength

Natural Gas Technical Analysis

Natural gas markets have rallied again in the early hours of Monday, as it looks like we are trying to grind back to the $3.50 region. Ultimately, this is a market that has just flipped over into the November contract, and as such, one would expect higher pricing. You can see that we have actually been rallying overall since February of last year, with this summer’s dip in August only hitting $2.65. So natural gas is stronger overall.

And I think with the season coming up of colder temperatures, it makes sense that we should continue to see a natural gas rally. There is a big gap underneath that has yet to be filled. So if, for some reason, we were to start falling toward the $3 level, I think that’s an area that bigger players get really interested in. The 200-day EMA currently sits at $3.23 and offers support. So we’ll have to wait and see how that plays out.

The 50-day EMA is at the $3.11 level and is turning higher, so we’ll see if this gap actually gets filled. Typically, they do, but they don’t have to. Over the longer term, I anticipate that natural gas will go looking to the $4 level, which is a large, round, psychologically significant figure that’s been important multiple times. And as such, I look at dips in the natural gas market as potential buying opportunities going forward.

I have no interest in shorting natural gas for about three months, maybe four. So, we’ll just have to see as the contracts roll over. Keep in mind that futures contracts do, of course, talk about the future. So, really at this point in time, between now and maybe March, I’m more of a buy on the dip type of trader.

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