Natural Gas Forecast October 30, 2017, Technical Analysis

Natural gas markets gapped higher at the open on Friday, exploding to the upside and above the $3 level. However, you can see that we sold off so drastically that be managed to break down below the $3.00 level. This is a market that continues to be very volatile, and of course very bearish above the $3 handle. If we can clear the $3.10 level, that would be very bullish, and I think that the market would continue to go higher. However, I think that there is more than enough supply above the $3 level to continue to keep pressure on the market. After all, US natural gas suppliers become very profitable, even the fracking companies above the $3 handle, so every time we get close to that level, there is more than enough supply to absorb the buying pressure.

I believe that in general, we are trying to test the $2.85 level underneath and the $3.00 level on top. I think we see a lot of volatility going forward, and I look as an opportunity to sell this market every time we rally. I’m looking for exhaustion above to take advantage of the oversupply in the market, and I believe that we will continue to go back and forth over the longer term, so short-term traders of course will continue your back and forth, employing range bound strategies. I am much more comfortable shorting this market than buying it, so I’m waiting for rallies that I can start selling off. It looks obvious to me that we will probably try to fill the gap, meaning that we could find ourselves down at the $2.89 level underneath. Regardless, I am not a buyer, and I think that being patient enough to wait for selling opportunities will continue to profit the trader.

NATGAS Video 30.10.17