Natural Gas Price Forecast August 2, 2017, Technical Analysis

Natural gas markets initially went sideways on Tuesday, but then fell significantly to reach towards the $2.75 level. That’s an area that has been important in the past, so it makes sense that we could see a bit of support in that area and a bounce certainly makes a bit of sense. We have been oversold in the short term, and I also recognize that there is a significant gap above, so we may have to go looking to fill that. Either way, I like the idea of selling rallies that show signs of exhaustion, as the market certainly is oversupplied and of course the natural gas markets continue to look soft longer term.

Continuing to sell rallies

Every time the market looks to soften up a little bit, I’m a seller. I think that the $3.00 level above is a major ceiling in the market, which extends all the way to at least the $3.10 level after that. Given enough time, I believe that we do breakdown below the $2.75 level, and then go looking towards the $2.50 level above which is a major target. Ultimately, I have no interest in shorting this market, and I believe that longer-term traders also recognize the fact that we are oversupplied and natural gas, and will more than likely continue to be. A softening US dollar does give a little bit of a boost to natural gas markets, but that is artificial at best, as supply and demand still dictates that we need to see lower prices over the longer term. Ultimately, I believe that natural gas is very much like gold was in the 1980s: a cell on the rallies type of situation, with no real signs of changing significantly in the near term.

NATGAS Video 02.8.17