Natural Gas Price Outlook – Natural Gas Continues to Struggle With Same Level

Natural Gas Technical Analysis

Natural gas markets continue to struggle right around the $3.50 level, an area that of course has been important multiple times in the past and now looks like it’s a bit of a magnet for price. All things being equal, this is a scenario that I think a lot of players will be looking at through the prism of a short-term ceiling. The question is, can we break it? If we can, then we can truly take off to the upside, perhaps going to the $4 level given enough time. On the other hand, if we were to pull back from here, it would be a simple “fill the gap and then roll over” type of play. And I think at that juncture, we’re looking at a move back down toward the $3 level.

I am cognizant of the fact that there is another winter storm coming to the United States. And that of course has everybody’s attention, but ultimately that’s probably going to be one of the last ones. And as we roll out of the cycle of colder temperatures in America, it does make sense that natural gas will suffer as a result. It’s a cyclical trade that we see every year. So, with that being said, I think you have to be cautious about getting overly bullish at this point.

And I think ultimately this is a market that continues to be very noisy, but I think it’s also on the precipice of making a bigger decision. And therefore, you have to approach with caution. What I’m actually looking for is an exhaustion candle from $3.50 to $4, some type of long wick that I can start shorting as I prepare for my spring trading.

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