Natural Gas Weekly Price Outlook – Natural Gas Continues to Climb

Natural Gas Weekly Technical Analysis

The natural gas market has shown itself to be pretty bullish during the week, but keep in mind this past week has also featured Thanksgiving, so volume will have been an issue as we were closed on Thursday and Friday; of course, it was a shortened session as Americans don’t come back for a full day anyway. Looking at this chart, I can see that the $5 level is going to be resistance above, and I think this is a market that will be watching $5 very closely. I would anticipate a certain amount of resistance in that area. So, I’m waiting to see whether or not we can break out above there if we can make a move towards the $7 level.

I wouldn’t hold my breath for that, though, at least not quite yet. I think more likely than not we will get some type of pullback, but it’s worth noting that places like Montreal have already seen a couple of snowstorms, so things may be a little bit more bullish this year than they were in the past couple. Nonetheless, I like the idea of finding dips to take advantage of, and I would love to get an opportunity to get long natural gas near the $4 level. Breaking above the $5 level, as I said, would be a major accomplishment. And it could send this market looking to the $7 level. That is a long-term target. And it is going to be a situation where we probably spike there. And then once we roll over into spring, it’s going to be a great short.

This is a cyclical market for me. I make no bones about it. I buy it this time of year, and I sell it most of the other eight or so months. In fact, truth be known, when we get the spike in winter, and we start to roll over, that’s actually when I make my money when I short natural gas. Natural gas is abundant. So, we get the temporary fluctuations in supply, but really, coming from a region that basically has it in the drinking water, it’s difficult to get overly concerned about supply.

So, with that being said, I do think that natural gas is a buy on the dip market for the next couple of months. And then once we roll over into the spring contracts, we have to start thinking about fading. We are in January now, which obviously is in the middle of the high peak demand season.

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