Natural Gas Forecast December 28, 2012, Technical Analysis

The natural gas markets rose during the Thursday session as we continue to bounce around in what appears to be the body of bearish flag. Right now we are very bearish of this market, although the cold weather has given a little bit of a boost to prices. Nonetheless, we did give up about half of the gains and closed just below the $3.40 level, an area that should be resistive.

Because of all this we are still bearish, and want to start selling rallies when they show signs of failure, or more importantly a break of the uptrend line that makes the bottom of this bearish flag. We believe that $3.00 will be the target going forward, if the flag breaks.