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Natural Price Forecast – Natural Gas Continues to Accumulate

By:
Christopher Lewis
Published: Apr 18, 2024, 13:45 GMT+00:00

The natural gas market seems to be in an accumulation phase, and as a result, I think that longer-term traders are trying to “front run” a potential move higher later this year.

In this article:

Natural Gas Technical Analysis

The natural gas market rallied a bit during the early hours on Thursday as we continue to bounce around the in and overall consolidation area that I think probably holds for most of the year. That being said, I am using this as an opportunity to buy an ETF position and therefore take advantage of cheap natural gas.

With the understanding that I may be hanging on to this position for a while. The reason I use an ETF or perhaps you could use a small CFD position. Is that I don’t know when it takes off. I do know that a dollar 50 is a level underneath that has been like a massive hard floor in this market going back multiple years. And of course, we also have the issue of where drillers are going to start walking away from the fields.

That being said, we need some type of external move or pressure to send this market higher, and that might come in the form of a heat wave in the summertime, or it may just simply be a situation where you’re waiting until fall to see temperatures plunge. Either way, eventually it will bounce, but by not being levered, you have the ability to take advantage of this move when it happens.

This looks very much like an accumulation phase. Accumulation is when the “smart money” will jump into the market and start taking advantage of a commodity or asset when it’s cheap. However, you will have to be able to hand onto the trade, and therefore you have to make sure you aren’t overexposed in this market.

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About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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