Natural Gas Price Forecast – natural gas markets explode upwards
Natural gas markets rallied significantly during the trading session on Tuesday, breaking above the $2.87 level, and thereby making a fresh, new high. The market looks likely to continue to go higher, but I might wait for a short-term pullback in order to go long. After all, this is a market that has been in a range for some time, and we are getting close to the middle of the overall consolidation. Remember, the $2.70 level underneath is support, while the $3.00 level above is resistance. I like the idea of buying dips in this market as we head into the colder months and will shortly be trading the December contract. That of course brings demand into the picture by the northeastern part of the United States, and therefore should bring in the seasonal trade.
Your capital is at risk
If we broke down below the $2.82 level, then I think we could probably pull back to the $2.77 level. I think we should see plenty of support between here and there though, so gives you the ability to pick up value when it appears. Natural gas markets do tend to be very erratic and can move very quickly so be aware of that. I would use the CFD market as it is much less expensive and of course you can size your trade accordingly. Unless you have the appropriately sized account, futures markets are going to be a dangerous place to be as this contract can rip either four, or against you rather quickly.