Natural Gas Price Outlook – Natural Gas Plummets

Natural Gas Technical Analysis

The natural gas market continues to just absolutely crater as warmer temperatures are on tap for the United States and the Northeastern part. This, of course, drives down one of the biggest drivers of natural gas pricing. With that being said, I think we could very well try to fill the gap and reach the 200-day EMA at the $3.60 level. If you remember, I said that we could try to fill this gap. I would love to see it try to fill this gap, and now it looks like we might actually do that. It’ll be interesting to see how this plays out.

Waiting for Balance Before Acting

I’m waiting for some type of balance to take advantage of, because this time of year is cyclically bullish, and I just don’t short natural gas in the dead of winter. There are still a couple of winter contracts to go through, including January. So, with that being said, let’s be cautious here. Let’s wait for natural gas to show some signs of strength that we can take advantage of and therefore play the right-hand side of the V, as it were.

We have no signs of that at the moment, but the one thing that could cause a problem in this market if you decided to short is that we could get a weather forecast in the future that temperatures are going to plunge again, and the next thing you know, natural gas is up a dollar. So, because of this, this time of year, it’s just simply easier to wait for a little bit of value, a slight bounce, because at least then you know where to put your stop loss.

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