Natural Gas Price Forecast – Natural Gas Consolidates At 200 Day EMA

Natural gas markets have gone back and forth during the course of the session on Thursday, initially falling towards the $2.39 level before turning around and showing signs of strength again to recapture the 200 day EMA. As you can see by the purple ellipse on the chart, we have been consolidating around the 200 day EMA for the last several sessions, making up a majority of the trading during the week. I do think that a bounce is coming, but whether or not we can break above the 50 day EMA is a completely different scenario.

NATGAS Video 11.12.20

The natural gas markets of course are very sensitive to weather reports, which are suggesting that we are going to get warmer than usual temperatures in the month of December in the United States, and that has a massive drag on price. Having said that, I do think the markets are setting up for another pop higher but I looking to fade that rally the closer we get to the three dollars level. In the short term, I suspect that an oversold bounce is probably about as good as it gets. Longer-term, we still have major issues with oversupplied, and therefore it is difficult to imagine a scenario where we have strong pricing power for the longer term.

With this being the case, the trade is probably to fade massive rallies at this point, due to the fact that we will continue to see a lot of noisy trading in general but we are starting to look at the possibility of trading spring contracts relatively soon and that of course does suggest that demand will fall.

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