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Natural Gas Price Forecast – natural gas continues to hang at low levels

By:
Christopher Lewis
Updated: Feb 14, 2019, 17:37 UTC

Natural gas markets have continued to go a bit sideways as the market hangs around very low levels. Because of this, I’m simply sitting on my hands and waiting for the appropriate trading opportunity.

Natural gas daily chart, February 15, 2019

Natural gas markets have been sold off rather drastically over the last several months, as we have left the coldest part of the year for the United States. At this point, the $2.50 level underneath is offering support, and it is a level that is historically important as we have seen so much in the way of support at this level over the last several years. At this point, I’m not willing to sell this market, because quite frankly we don’t have that far to go before you can run into trouble. However, I’m not willing to buy this market as although it is oversold, the reality is that there are far too many reasons to think that natural gas will remain cheap.

NATGAS Video 14.02.19

After all, there is a massive oversupply of natural gas in the United States and Canada, which both could power the world for 300 years based upon proven gas in the ground. With that in mind, the fact that we rallied should get you interested in selling at signs of exhaustion. We have fallen so far that I think we need a significant rally though, probably to at least the $2.75 level, perhaps even the $3.00 level. As soon as we get to those levels and show signs of exhaustion, I will not hesitate to sell this market. From a technical standpoint, you could make an argument for a falling wedge, which is a slightly bullish pattern, but I will ignore those buying signals and simply look for an opportunity to sell at higher levels as it goes with the longer-term trend.

Please let us know what you think in the comments below

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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