Natural Weekly Price Forecast – Natural Gas Continues to See Buyers

Natural Gas Weekly Technical Analysis

The natural gas markets have had another strong week after initially dipping below the $3 level, only to turn around and rally rather significantly. We are currently testing a swing high where a shooting star formed in June. So, the question now is whether or not we can continue to rally. At that point, the market probably goes looking to the $3.60 level over the longer term.

Keep in mind that this is a market that is highly sensitive to weather. And this time of year, we start to see demand pick up in the northeastern part of the United States as cooler temperatures come. And you have to keep in mind that the natural gas markets are a uniquely American contract and is driven by the futures markets, which are trading a few months out.

That is part of what you’re seeing right along with the hurricane issues and distribution problems. And then again, we have plenty of geopolitical concerns that could have people thinking that natural gas disruptions are possible. All things being equal though, this is more or less the cyclical trade that we see every year. And it’s one that I follow like clockwork.

Every year I get in somewhere around August in a non-levered position and get out sometime in October. And I’ve done that again and I don’t catch the entire move, but it’s one of the simplest ways to pad my account every year that I have found. At this point, I think we do go a bit higher, but we are definitely a little overstretched.

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