Natural Gas Forecast October 16, 2014, Technical Analysis

The natural gas markets fell during the course of the day on Wednesday, slicing below the $3.80 level. The resulting action though turn things back around and formed a hammer, a strong sign of support. With that, it appears that the market is going to continue to stay within the consolidation area that we have been trading in for some time. A break of the top of the hammer, we feel that this market could probably go to the $3.95 level without too much in the way of trouble. On the other hand, if we break down below the bottom of the hammer, we feel that the market would then head down to the $3.50 level.