Natural Gas Price Outlook – Natural Gas Looking to Drop Further?

Natural Gas Technical Analysis

The natural gas markets have drifted a little bit lower during the trading session here on Wednesday, as it looks like we are trying to break below the crucial $3.20 level. If we do break down below the $3.20 level, then it’s possible that we could drop all the way down to the $3 level. The $3 level is, of course, a large, round, psychologically significant figure and an area where we’ve seen support previously. And in fact, I believe that this is a market that continues to see the $3 level as massive support for the overall range between what I think is $3 and the bottom, and $4 on the top.

So, with all of that being said, I do think you’re in a situation where we will test this area. If we were to break down below the $2.90 level, it could send natural gas much lower. But right now, I’m just looking for more sideways action than anything else. We did break down below an uptrend line and now we’re drifting lower, but it’s also worth noting that the Europeans are importing natural gas. So, the complete meltdown in price this time of year, although typical, may not happen. It may be more of a drift lower. I prefer to short the market after signs of exhaustion. We don’t really have that right now, but if you’re more short-term, you may try to play the breakdown here. That is a feasible option as well.

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