Natural Gas Price Forecast – Natural Gas Continue to Test 200 Day EMA

Natural gas markets fell again during trading on Thursday, as we are rolling over into the March contract. This is typically a time of year we start to see serious selling, based upon the idea of warmer temperatures coming sooner rather than later. With this, I look at any rally as a selling opportunity, especially if we can get near the 50 day EMA above or even better yet near the $2.80 level. The 200 day EMA in and of itself will more than likely cause a bit of a bounce but I would not anticipate that it is going to save the market longer term.

NATGAS Video 22.01.21

There is stimulus coming but quite frankly that has almost nothing to do with natural gas. The biggest problem natural gas faces is that it is so overabundant. Simply put, we will never be able to wipe out the supply unless of course we stop drilling altogether. That is going to happen anytime soon and every time that the market does make a significant move to the upside, the drillers go right back to work. This is a longer-term secular bear market, although price obviously cannot go to zero dollars anytime soon. Because of this, look at rallies that show signs of exhaustion as a gift to start shorting yet again. I do believe that it will be choppy, but still have a very strong downward bias. In fact, I do not have a scenario in which a willing to buy this market, if you squint, you can even make out a bit of a head and shoulders pattern on the daily chart.

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