Natural Gas Price Forecast February 23, 2018, Technical AnalysisThe natural gas markets went sideways during the trading session on Thursday, bouncing around the $2.70 level. Although I am very negative when it comes to natural gas, the market needs to bounce.
Natural gas markets went sideways during the trading session on Thursday, hanging around the $2.70 level. I think that we need to bounce from here though, and as we continue to grind a little bit higher, I feel that it is only a matter of time before traders start to do some short covering. At that point, I think value starts entered the marketplace, and give us an opportunity to short natural gas for much higher levels, something that I would love to do. I believe that the $3.00 level is a bit of a “ceiling” in the market and should find a lot of resistance floating about.
While some short-term traders will try to take advantage of any bounce, perhaps scalping the market, it’s likely that being patient will probably be the easier trade to take, as we can use the weight of the attitude of traders around the world to continue to start shorting. Ultimately, I think that this is a “civil rallies” situation, especially considering that we are leaving the cold temperatures in the United States behind reasonably soon, and of course oversupply natural gas will continue to be a longer-term issue. For what it’s worth, anecdotally I can tell you that where I live, natural gas fracking is going full tilt, and is showing no signs of slowing down. Longer-term, I think that natural gas will continue to be a very soft market. The occasional rally should be looked at as an opportunity to get short. I see resistance all the way to at least the $3.25 level above.