Natural Gas is something I monitor this time of the year. If you look through its price patterns, you will find a tendency for price to rise during the month of October as the market prepares for the winter season. However weather forecasts of warmer than average weather temperatures put extra damper to the price of the Natural Gas. Yesterday we saw price tumble to its biggest one day percentage (10%) drop on expectations of a supply glut. The only way for the price to recover is sudden strong forecast of weather related demand in the near future. Current weather forecast suggests that moderate temperatures to persist till at least the first half of the winter due to El Nino. Overall many global commodity markets have suffered from high supplies and concern about demand which is mainly due to the slower than expected world economy.
From the chart above, price is currently trading at support of 2.076. If price breaks this support, the next support would be around 1.750. The falling window pattern yesterday highlighted the weakness in price and for Natural Gas to rise, this falling window level would be the resistance area which traders need to keep a close eye at. I would be looking for bullish sign to see if there is any revival for the Natural Gas. If there is I would definitely buy. However due to current weather forecast, upside price targets would not be big.