- Natural gas in the spot market has been just stretching higher and higher over the last several weeks as we continue to see a lot of resistance at $3.15.
- That being said, you can see that $3.15 is an area that's been important multiple times in the past and it does look like we're doing everything we can to break out.
Technical analysis suggests that we are an ascending triangle, or if you want to use more recent action, a W pattern, both of which tell us that we're going higher. That does make a certain amount of sense considering that it is winter coming in the Northeastern part of the United States, and that is the biggest consumer of natural gas. So, with all things being equal, I like the idea of buying short-term pullbacks, but I don't do so with a lot of leverage.
Top Forex Brokers
This Market Can Cost You
But frankly, this is a market that can lose its mind from time to time, as it tends to move on things that are not easily accessible. There is the weather report. Most traders can get ahold of one of those for Boston or New York, but transmission of natural gas in the pipeline system in the United States is something that needs to be understood because that can greatly influence supply and demand as well as storage. So, it's a pretty complex market under the best of circumstances.
Nonetheless, this is a market that looks like it's trying to break out and if and when it does, it could probably go as high as $3.50 rather quickly. Short-term pullbacks should continue to be thought of as potential buying opportunities this time of year. Typically, what I'll do is I will use this time of year and the cyclicality of natural gas to put on small positions in order to pad my returns for the totality of the year.
Ready to trade daily Forex forecast? Here’s a list of some of the best commodities brokers to check out.