Natural Gas Weekly Price Outlook – Natural Gas Recovers This Week

Natural Gas Weekly Technical Analysis

The natural gas market had a fairly strong week as we are trying to get to the $3.50 level. This was flying in the face of a horrific week on the previous candlestick, but really at this point in time, I think this is more or less a dead cat bounce or perhaps if you want to look at it through the prism of something else, one last hurrah before the season is over.

Keep in mind that there is cold weather coming to the United States in the short term, but that’s really all we’ve got going on here. I am looking for exhaustion to start shorting this market, and it has become clear that the $4 level is a major ceiling in this market. So, I don’t think if we break above there again, barring some type of major event.

Most traders are not aware of the fact that you are trading in a US contract. So, this is all about US weather and nothing else. Storage around the world is fairly robust at the moment. So that has a major factor to play as well, as pretty much all of Europe is fully stocked or close to it, with maybe the exception of Germany, although they are, last time I looked at about 80%, I believe. So, it’s not like there’s a dire situation right now.

With that and the fact that warmer temperatures are coming to the US, it makes a lot of sense that we will fade rallies. I haven’t participated in the move higher this week because quite frankly, I do think that as we are trading the March contract, it’s only a matter of time before we start to look at the end of March, which is typically a much warmer time of year, and then of course roll over into April.

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