Natural Gas Price Outlook – Natural Gas Gaps Higher to Open the Week

Natural Gas Technical Analysis

The natural gas market gapped higher to kick off the trading session on Monday but has spent the majority of time since falling. The question at this point in time is, are we going to build up enough momentum to turn things around and start to look bullish again? Colder temperatures are coming, and we are getting ready to roll over in the contract. So, it’ll be interesting to see how December opens up, which will be on Wednesday. So, we have quite a bit of noise for the next day or two in the futures market, but eventually it should see a bit of a boost.

After all, December is a very cold month, and of course, this is a very cyclical market. Natural gas demand is picking up in the United States as it’s starting to get a little bit cooler. We’ll just have to wait and see whether or not any truly cold weather comes. But one would assume that traders will bank on the idea of December being colder as a no-brainer trade. It is a cyclical trade that I take every year.

Short-term pullbacks like the one we’ve seen after the gap hire quite often will end up being buying opportunities. The 200-day EMA sits just below with the 50-day EMA starting to curl towards it and maybe even get above it to kick off the so-called golden cross, where buyers start to look at the market through a positive tone longer term. Even if we break down below there, we have a big gap that extends down to the $3 level, which of course, is a large, round, psychologically significant figure. It is a market that had filled a gap previously and then gapped from filling that gap. So, I do think there’s a lot of noise at the $3 level, and that is more or less, I think, going to be your floor.

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