Natural Gas Price Outlook – Natural Gas Gaps Higher at Rollover

Natural Gas Technical Analysis

The natural gas market has shown itself to be very amicable to the idea of rolling over into the November contract, as we jumped to the 200-day EMA immediately. Keep in mind that November typically will see a certain amount of strength anyway due to the fact that we will start to see colder temperatures. With that being the case, it makes sense that demand for natural gas will continue to strengthen and therefore prices should eventually take off.

We had an inline natural gas inventory report. So that, of course, helps the situation as well due to the fact that it’s not exactly like we’re building massive stores of natural gas, and the cold temperatures could very well work its magic on the market. At this point short term pullbacks, I do think, are buying opportunities all the way down to at least the $3 level, and the market memory in that region.

This is a market that I think will try to grind its way to the $4 level before it’s all said and done, but that’s probably sometime in maybe January. But either way, this is a market that I have no interest whatsoever in shorting. And therefore, I look at each dip as a nice opportunity for picking up value along the way in what is a very cyclical market and a market that provides two massive trades every year. Start buying when temperatures plunge, start shorting when we get closer to late spring in America as demand will drop.

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