Natural Gas Price Outlook – Natural Gas Continues to Show Strength

Natural Gas Technical Analysis

The natural gas market gapped a little bit higher only to turn around and fill the gap. All things being equal though, bouncing from there does suggest that the market is going to continue to go higher and breaking above the $3.60 level opens up the possibility of a much bigger move, perhaps to the $4 level. I do not like shorting natural gas this time of year and I do think that it continues to go higher. I look at short-term pullbacks as potential buying opportunities, with the 200-day EMA at the $3.24 level as a bit of a short-term floor.

The $4 level above obviously is a large, round, psychologically significant figure, but we are starting to see temperatures cool off a bit in the United States. So, I do think that’s the direction we go in general. Natural gas will continue to be very volatile. It always is, but I look at this as a market that’s going to have several opportunities over the next three or four months. As every time it falls, I’m looking for a balance to start getting involved in.

I would keep my position size reasonable, though, because of the volatility. And in fact, you may be able to play something like ETF along the lines of UNG to take advantage of this ride if you do not want to go into the futures markets. The CFD markets are also a great possibility because they offer smaller positions as well. Be cautious, this is a very dangerous market, but it should start swinging to the upside.

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