Natural Gas Technical Analysis

The natural gas market has been looking for some type of floor over the last couple of trading sessions as the $2.20 level continues to be of importance. With that being said, the market is likely to continue to be very noisy, but I also recognize that even if we break down below here, I believe that the $2 level is a bit of a floor. Longer term, I think we are going to look at a situation in a market that quite frankly is cyclical.

And given enough time, we will see the price of natural gas rise as temperatures drop. It happens every year. That makes sense because demand picks up. So, I came into this market with very little leverage, and I use an ETF. But if you cannot do that, a very small CFD position is the way to go. It’s one of these deals where it becomes an investment. And sooner or later, we get a spike. We take our profit, and we move on.

That being said though, you have to be willing to hang on to the position and you also have to understand that it is very hard to time this because you have to time it based on weather. Because of this, it is very hard for retail traders to hang onto, as the weather in the Northeastern part of the US is not always very stable. However, we will eventually get lower temperatures, and this will drive natural gas higher.

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