Natural Gas Price Outlook – Natural Gas Looks to Bounce on Inventories

Natural Gas Technical Analysis

The natural gas markets have bounced slightly during the early part of the Thursday session as storage numbers are due later today. The $3.00 level of the course is a large, round, psychologically significant figure that a lot of people will be paying close attention to. Of course, the announcement later in the day will have a major influence. It is expected that there will be a drawdown of 89 billion, but we will have to wait and see how that plays out.

I do think that colder temperatures coming in the next several days could provide a little bit of a floor. The question, of course, is how long does that last? Currently, where I am, there is a winter weather advisory. It will be interesting to see if that continues to be the case, but right now it certainly looks like market participants are doing what they can to defend this $3.00 level, which does make sense considering where we are in the calendar.

Value Hunting Technical Analysis

Over the next several days, the weather, of course, will be very cold, especially on Sunday, but this is a situation where I think you probably get one or two more pops higher this winter. That is generally the case. So, I am bullish, but I am also cautiously optimistic. I am not putting a ton of money into this. In fact, this is a market that I swing trade with small positions. That way I don’t have to worry about the day-to-day volatility.

I do think we are in an area that makes a lot of sense to see value hunting coming back in. We do roll over into the March contract here on the 28th of January. Although March can still be quite cold, it is really not for another contract or two where we really see the seasonality change.

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