Natural Gas forecast for the week of February 5, 2018, Technical Analysis

Natural gas markets fell apart during the week, specifically on Thursday and Friday, as we have seen so much in the way of negativity due to mature is getting ready to become warmer in the northeastern part of the United States. I believe that the market will probably continue to drop, perhaps reaching down to the $2.75 level, but I think it’s still easier to trade this market from the shorter term, as it’s likely to see a lot of volatility. That’s typical for the natural gas markets, because quite frankly they are a bit thin at times. Typically, January marks the high point of the year for pricing, as demand will continue to dwindle.

Beyond that, there is a massive amount of oversupply in the marketplace, and I think that it’s only a matter of time before that overwhelms any buying pressure. The rallies that will appear occasionally should be a nice selling opportunity, and it now looks to me as if the $3.50 level offers a significant amount of resistance at the market more than likely won’t be able to break out above. The overall consolidation should continue, even though we have seen such a massive amount of bullish pressure over the last several months. I think that the large and negative candle this past week would show just how volatile and dangerous this market can be. It also shows that the rally is all but over. It would take a move above the $3.50 level to start buying again at this point.

NATGAS Video 05.02.18