Natural Gas Price Outlook – Natural Gas Drops Slightly on Thursday Open

Natural Gas Technical Analysis

The natural gas market has gapped a little bit lower to kick off the trading session on Thursday and has fallen since then. Quite frankly, I want to see this market fall further so that I can buy it at a reasonable price. It is still a little overextended for me, and the massive volume that came into the market on Wednesday is only going to make that a little bit more difficult. But I would love, at the very least, to see natural gas drop to the $3.23 level where the 200-day EMA sits.

Preferably, I’d like to see natural gas fill the gap or at least get close to $3. Whether or not that happens remains to be seen. But I recognize that last Friday we jumped into the November contract. And therefore, we are pricing colder temperatures onto the markets right now and therefore higher demand. Any rally at this point in time, I think, makes sense, but I don’t want to chase the market. It’s that simple. The gap higher on Friday was a bit much to simply jump in and chase, but those of you that did have done okay since then, you had a nice little move.

I’m looking for the pullback and then the slight bounce to get involved. I don’t have any interest in shorting natural gas this time of year. The next couple of months should be fairly strong from a pricing standpoint, this is not to say that the market can’t fall from here, but the reality is that there is more demand in the winter leads to higher prices. It’s a very seasonal market.

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