Natural Gas Price Forecast: Natural Gas Continues to See Sellers Above

Natural gas markets initially rallied a bit during the trading session on Friday only to see sellers come back into the marketplace just below the $3.00 level. The shooting star of course is a negative sign, but quite frankly this is more of what we have seen recently. The consolidation that we have been in makes quite a bit of sense, due to the fact that there is a massive amount of supply out there that is going to cause downward pressure. Yes, I understand that the market is going to continue to focus on the cold temperatures, which means that we could see some buyers, but longer-term the reality is that the springtime is coming, and demand will drop off of a cliff. This is a short-term bullish situation, followed by the longer-term fundamentals.

NATGAS Video 15.02.21

To the downside, the market is likely to go looking towards the 50 day EMA, near the $2.75 level. If we can break down below there, then the market is likely to go looking towards the $2.50 level. On the other hand, the market was to turn around a break above the $3.06 level, we probably have to “reset” at higher levels, perhaps selling at the $3.20 level. In general, this is a market that I think will continue to be very noisy, but overall, it is more than likely going to be a scenario where the sellers are going to jump in and punish this market if it gets a little bit overdone. I do anticipate a lot of choppy behavior, but I still only sell natural gas this time of year, and therefore it makes quite a bit of sense that I will simply look for shorting opportunities.

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