Natural Gas Price Outlook – Natural Gas Rallies Again on Wednesday

Natural Gas Technical Analysis

The natural gas markets have rallied a bit during the early hours here on Wednesday again, as we continue to break to the upside. We have, as of last Friday, jumped into the November contract and the result, of course, is that we have seen the idea of demand being priced back into the market. This is a market that has been very strong and I do think it makes a certain amount of sense that it is a market that you can’t short, not anymore, especially considering that we are now talking about November pricing. We must keep in mind that natural gas demand is expected to increase with the colder temperatures in the United States and Europe.

So, I have flipped from a selling trader to a buying trader when it comes to this market. However, we are a little overdone. I don’t necessarily want to chase the price of natural gas all the way up here. So, I think a short term pullback is likely to be a major trigger to getting involved in this market. The 200 day EMA is at the $3.22 level, and the 50 day EMA is at the $3.07 level.

Furthermore, we do have that gap from the changeover into this contract that could send this market all the way down to $2.90 or so. So, in other words, I do think a pullback is necessary. If you’re not already in this market, you’re probably waiting for it and then a bounce to tell you it’s time to get involved. However, to the upside, I still see the $3.60 level as very possible, as well as the $4 level. I certainly won’t be shorting natural gas, at least not for several months, but now I’m just looking for little bit of value that I can take advantage of.

For a look at all of today’s economic events, check out our economic calendar.