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Natural Gas Price Forecast – natural gas continues to consolidate

Christopher Lewis

The natural gas markets went back and forth during the trading session again on Friday, as we continue to hover around the $3.00 level. This is an area that of course attract a lot of attention as it is a large, round, psychologically significant figure. That being said, the fact that we have a massive gap above tells me that it is likely to bounce from here to fill that gap. Signs of exhaustion near the $3.30 level will be welcomed selling opportunities, as it coincides nicely with the 20 day EMA, and of course an area that previously had been important. I think that rallies are to be sold in this market, because natural gas is oversupplied and of course we have completely wiped out the massive amounts of bullish pressure from the early winter trading. I believe that beyond the $3.30 level there is also a massive resistance at the $3.50 level, so I’m not interested in buying this pair although I fully do expect that pop to come soon.

NATGAS Video 14.01.19

If we do break lower to a fresh, new low then I think the market probably goes looking towards the $2.75 level, followed very quickly by the $2.50 level after that. This is a market that I think continues to be choppy, but overall I think the downside should be what we look at, and buying is a suckers game because of the extreme move that we have recently seen. The volatility will continue to be an issue, but I like the idea of selling if the buyers get a bit too resilient.

This article was originally posted on FX Empire

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