Natural Gas Price Forecast – Natural Gas Continues to Look Strong But Pulls Back

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Natural Gas Technical Analysis

Natural gas markets have pulled back slightly during the early hours on Tuesday as we continue to see an overall upward move, but we are getting a little stretched at this point. This does make a certain amount of sense considering that the market has been pretty much straight up in the air for a minute now. And that of course eventually runs into a little bit of trouble. The relative strength index is touching the 70 level, so it is entering the possibility of being overbought. But I think at this point, what we really need to pay close attention to is how the market reacts once it gets closer to the $2 level. If we see it bounce from there, this might be a nice entry.

If you’re already long of this market, then there isn’t a whole lot to do other than to make sure that you don’t lose any money. I personally am long of natural gas, but I do it through an ETF, so I don’t worry about the leverage, because this time of year is historically fairly weak for natural gas. But I also recognized that we were at such extremely low levels, and of course, all of the fighting going on in the eastern part of Europe did leave the possibility of natural gas spiking a bit here and there.

I may choose to lighten up my ETF position just a little bit, but at this point in time, I think I’m more apt to aim for $2.50, even if that’s three months down the road. And that’s the key here. I’m an investor in natural gas, not a trader. I’m using UNG, an ETF in the United States, and there’s really no cost involved. So, with that, it’s something that I can hang on to. It doesn’t have leverage. I just take profit when I feel it’s time. I don’t know that it’s time to close out the entire position right now, but I do think a pullback makes quite a bit of sense.

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This article was originally posted on FX Empire


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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