Natural Gas Forecast February 26, 2018, Technical Analysis

Natural gas markets initially cratered during the trading session on Friday, reaching down to the $2.63 level. We found a bit of support in that area though and bounce significantly to form what should be a hammer for the day. That’s a good sign, and quite frankly I think that is only a matter of time before we rally. I think that ultimately the markets will rally, but the consolidation that we are and should continue to put bearish pressure on this market. After all, the markets have a major oversupply issue, and I believe that the $3 level above would be massive resistance. Eventually, we will get a nice rally that we can take advantage of, and I am willing to sell at the first signs of resistance.

The market had unwound so significantly that I am cautious about selling at these lower levels. I think that the market needs a couple of good, strong days ahead so that we can start selling. I think that the market continues to see a lot of volatility, but most certainly a lot of negativity. The oversupply will only get worse as the warmer temperatures come to the United States, so I think that we will see opportunities if you are patient enough, but in the meantime it’s very difficult to start selling at these low levels. It’s not that it won’t work, it’s just that there are much more in the way of profitable trades above.

NATGAS Video 26.02.18