Natural Gas Price Outlook – Natural Gas Drifts a Little Lower

Natural Gas Technical Analysis

The natural gas market has dropped a bit in the early hours here on Monday, as we continue to see a little bit of hesitation. All things being equal though, this is a market that I also think will have buyers jumping into the market based on the previous gap. And of course, the fact that we’re now trading the November contract, meaning that demand should pick up due to colder temperatures in not only the United States, but Canada and northern Europe.

That is a well-known cycle that happens time and time again every year, and I think that’s exactly what we are going to see happen. If we bounce from here, then the $3.60 level will be targeted. If we can break above there, then you could be looking at a move all the way to the $4 level, which I would expect to hit sometime this winter.

I have no interest in shorting this market, and I do think that somewhere near the $3 level is where we will have a massive amount of support. The $3 level, of course, will attract a lot of headline noise, but at the end of the day, it’s an area that’s been important in both up and down trends, so I expect it to reassert its importance on the way back down. I’m looking for a little bit of a drop and then a bounce, and once we get a bit of a bounce, then I think it’s time to start playing the long natural gas game, at least for a couple of months.

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