Natural Gas Price Outlook – Natural Gas Looks Heavy

Natural Gas Technical Analysis

The natural gas market initially tried to rally a bit during the trading session here on Thursday, but ran into resistance near the $3.50 level. By turning around and falling, it does look like we are in the midst of turning a bit of a double top here, and market participants are likely to see a lot of noise overall between the $3.60 level on the top and $3 on the bottom. Ultimately, this is a mark that I think is in the midst of trying to change its overall attitude due to the temperatures dropping, and the rollover to the December contract is coming fairly soon. So that is something worth paying attention to as well. Ultimately, this is a market that I think will remain volatile, but I’m looking to buy dips.

I like buying natural gas this time of year and don’t have any interest in shorting it, although you can make an argument for a short-term trade to the downside, but I prefer to buy the dip and simply ride as we go higher, based on the overall demand picking up over the next couple of months. I do think eventually we get to the $4 level, but it may take some time to get there. With that being a large, round, psychologically significant figure that a lot of people will be watching above there, then we could be looking at $4,40, but it’s going to take a while to make that happen. We are still a little early in the winter season, but we are definitely heading into the winter season once we roll over to the next contract on the 29th, and go into December, things will probably pick up again.

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