Natural Gas Price Forecast July 31, 2017, Technical Analysis

Natural gas markets went sideways overall during the Friday session, but did get a little bit of a boost as we broke above the $2.97 level during the day. Ultimately though, I see a significant amount of resistance just above, especially near the $3.00 level. With that being the case, I’m looking for rallies that show signs of exhaustion that I can sell. There is plenty of resistance between the $3.00 level and the $3.10 level above. With that, I’m looking for selling opportunities based upon not only physical resistance, but the fact that we have so much in the way of oversupply in the market. After all, most of the rally that occurred during the Thursday session was due to a less than expected build in natural gas inventories in America. While that isn’t as bad as thought, it still is in a positive development longer term. We have seen the market rally off these “less bad” numbers in the past, and they always end up the same way: selling opportunities.

Selling rallies repeatedly

I believe that the best strategy for trading this market is to simply sell rallies as they appear. You would be best served to using a low amount of leverage though, because this market does tend to be very volatile. This is a longer-term secular issue for the natural gas markets, as we have far too much of the commodity to ever soak up in demand. This is a market that can make people very wealthy, if they are patient enough to take the trades and of course not lever themselves up too much so that they have the ability to deal with the fluctuations that you can see. I remain very bearish of the natural gas markets.

NATGAS Video 31.7.17