Natural Gas Price Forecast – Natural Gas Continues to Plummet

Natural Gas Technical Analysis

Taking a look at the natural gas market you can see we have fallen yet again and we are getting to the $1.50 here, but I don’t know if we’re there quite yet. I have to do some research, but we are getting to the point where it’s no longer profitable to extract natural gas from the ground and think about what that means.

That means some of these companies who do that are going to disappear. Some are going to shutter their drilling systems. And therefore, we will see supply turn around. However, you don’t really know how long that takes, and because of that, you have to be very cautious in this position. If you are going to trade natural gas in the $1.50 level is an area that I’m very interested in because it was so important four years ago.

Can we fall below there? Yes, of course we can. But at that point I’m willing to step in with an ETF position. And if you don’t have the ability to trade in ETFs, that’s fine. You can use something like a CFD, but use very incremental and small positions. This is assuming you want to get long of natural gas.

I mean, at this point in time, if you are shorting the market, you are doing what is known as stepping in front of a steamroller to pick up pennies. There’s only so much further the market can go. Eventually, something will have to give. I suspect that one day we will see a ripping move to the upside, but that one day might not be until fall, we just don’t know. There is the possibility of a winter storm between now and the actual commencing of spring in the northern hemisphere, and that could also send the market higher.

But I just think simple supply and demand has gotten so out of whack here that sooner or later things turn around. But I do not want to be levered because it can cause such damage if you’re a short term trader, this probably is no longer the market for you. That being said, this could be one of those situations. As I go to the weekly chart that you can see, the $1.50 level is a red line in the sand and perhaps they hold. You could very easily get a situation where you double your money. You’re just going to have to be very patient.

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