Natural Gas Forecast October 4, 2017, Technical Analysis

Natural gas markets went sideways initially on Tuesday, but then rolled over towards the $2.88 level. This is an area that has offered support, but it’s likely that we will continue to see trouble. I think that rallies should be selling opportunities, as the $3 level offers a massive amount of resistance. The fracking producers in the United States continue to be very active above $3, as it is an area that things are becoming much more profitable for those companies, so therefore I think there’s plenty of reason to start selling in the end. I think that rallies that show signs of exhaustion are nice selling opportunities, and perhaps should send this market towards the $2.75 level over the longer term. I think that the resistance extends quite far above, and every time we rally, it’s likely that the markets will continue to struggle.

The oversupply continues, and quite frankly a lot of the natural gas market issues stem from producers sitting on the sidelines simply waiting to sell natural gas at a price that they can live with. Because of this, it’s likely that the market will continue to struggle in general, and therefore I think we will find ourselves and arrange. The $2.75 level underneath is very supportive though, so I don’t know if we can break down below there. If we do, then the market could go as low as $2.50 underneath, but I think it’s going to take a lot to have that happen. Ultimately, this is a market that will continue to show volatility due to the lack of liquidity at times, but there are plenty of opportunities in the future, so look for exhaustion to take advantage of as we continue to see a real lack of conviction by the bulls.

NATGAS Video 04.10.17