Natural Price Forecast – Natural Gas Continues to Consolidate

Natural Gas Technical Analysis

The natural gas market did pull back a little bit during the early hours on Thursday, as we continued to see more grinding back and forth. We are currently stuck between the 50 day EMA and the 20 day EMA indicators, and really at this point, I don’t even think that matters as it seems like we are continuing to pay more attention to the oversupply at the moment.

I think what we have is a cyclical trade where later this year natural gas will spike again. But right now, we have accumulation going on. Longer term traders, including myself, are more than comfortable buying at these extraordinarily low prices, but they don’t deal with a lot of leverage. I’ll be doing it through an ETF and buying these little bits and pieces of dips that I can take advantage of.

You can’t be overly levered in this position because obviously you could be sitting on dead money for a while. However, if you are willing to look at it through the prism of an investment, this might be a really good market to get involved in. Expecting to collect your profit, either during a heat wave in the middle of summer or closer to fall.

With that being said, I think it is essentially dead money for short term traders. I mean, if you want to be bothered trading the short term charts in natural gas, good luck. But at this point in time, it looks to me like the $1.50 level underneath is a hard floor. And history does suggest this as well, as there have been a few major bottoms formed in this region.

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