Natural Gas Price Forecast – Natural Gas Breaks Out

The natural gas markets rallied significantly during the trading session on Tuesday, breaking towards the 200 day EMA as US companies are starting to talk about cutbacks. Quite frankly, we need bankruptcy still, but given enough time it is a bit of a certainty. Quite frankly, there are far too many companies out there drawing for natural gas, so as they cut production it can perhaps help the market a bit.

NATGAS Video 06.05.20

If we can break above the top of the candlestick, and perhaps even the $2.20 level during the trading session coming out, then it is possible that we continue the longer-term uptrend. In the short term, we may have a little bit of a pullback to reach towards the $2.00 level, an area where I think there will be a significant amount of support. After all, it is a large, round, psychologically significant figure and of course an area that had offered a significant amount of resistance in the past.

That being said, it does not mean that is going to be an easy rise higher but there are so many traders on the short side of this market that it is highly likely that short covering rallies could cause massive moves on the occasional session. Pay attention to the inventory numbers later this week, that could be yet another catalyst to send this market higher if it surprises. To the downside, there is still a major gap that has yet to be filled but I do think that the tide has finally turned in favor of the natural gas markets for the longer term.