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Natural Gas Price Forecast January 18, 2018, Technical Analysis

By:
Christopher Lewis
Updated: Jan 18, 2018, 05:24 UTC

Natural gas markets exploded to the upside during the trading session on Wednesday as we continue to see buyers step into this market based upon colder temperatures in the northeastern part of the United States. However, not all is well in the markets longer term.

Natural gas daily chart, January 18, 2018

The natural gas markets as you can see rallied a bit during the trading session on Wednesday, reaching as high as $3.28 during trading. However, we have pulled back slightly from there, and it looks likely that we are probably coming close to being exhausted, especially considering that there is a huge barrier extending to the $3.40 level. This is the wrong time of year to expect that the markets to continue going higher for very long, as they tend to top out in January.

Because of this, I like the idea of selling when we finally do get of exhaustive move or a roll over, and ultimately, I think that is coming rather soon. I believe that we will reach towards the $3 level initially, and then back down to the $2.75 level. I would stand on the sidelines still in this market, but we will eventually find a reason to go short. If we were to break above the $3.40 level, then I think of things explode to the upside as it would bring in a “blow off top.”

Volatility is the one thing you can count on in this market, so if you have the ability to trade the CFD market, that’s probably going to be the easiest way to deal with this. Futures markets tend to move rather quickly, and can be rather damaging. Overall, markets participants look bullish, but I know that we have far too much in the way of supply.

NATGAS Video 18.01.18

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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