Natural Gas Price Outlook – Natural Gas Rallies to Kick Off Shortened Week

Natural Gas Technical Analysis

The natural gas market has gapped a little bit higher during the opening hours here on Monday, but really, at this point in time, we have a situation where the 50-day EMA is sitting right here as well. So if we can break above the $4.25 level, I think we will clear that cluster and go to the upside, fueling a bit of a squeeze higher, as this market is known to do.

Seasonal Demand and Contract Rollovers

Over the longer term, I do think that natural gas will make its way toward the $5 level given enough time, as it is the right time of year to see a lot of demand for natural gas as far as heating is concerned. With that being the case, I like the idea of buying short-term dips, and I think somewhere around $3.75, you might have a little bit of a floor.

The natural gas markets, of course, will move on the latest weather reports coming out of the United States, specifically the northeastern part of the United States, as it is one of the greatest consumers of natural gas. As things stand right now, it looks like it might be a little bit volatile. It will be thin due to the fact that we have a major holiday here on Thursday. Most traders are probably a little bit hesitant to get involved; nonetheless, this is a nice seasonal trade that comes about every year. On the 29th of December, next Monday, we will have the rollover to January, which generally should be positive as well.

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