Natural Gas Technical Analysis
The natural gas market has drifted a little bit lower during the early part of the trading session here on Wednesday, as we are hanging around the crucial $3 level. $3 3 of course, is a large, round and psychologically significant figure, and of course, that is important. The market is starting to look at the winter months as a potential catalyst for warmer temperatures. We are basically filling the gap here. So, I think you’ve got a situation where it’s only a matter of time before we rally in this bigger cyclical market for the time of year.
Ultimately, I do think that as we are in the November contract getting ready to head into the December contract in about a week and a half, then you’ve got the possibility of starting to turn around and really jump to the upside. $3.50 would be a target eventually, as would $4. I don’t have any interest in shorting natural gas, not this time of year, although I freely admit that we could drop a little bit further to fill the gap, but basically, we’re right there.
Over the longer term, I would anticipate that it’s only a matter of time before the demand coming out of the United States and Europe comes in to pick things up. And with that being the situation, I believe that if you are a longer term swing trader, this is an enticing market to pay close attention to at the moment and could lead to a nice swing trade.
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