Natural Gas Price Forecast – Natural Gas Explodes to Upside

As Saudi Arabia has started a price war in the oil markets, it collapsed the price of crude oil, and therefore it created havoc in a trade that a lot of desks have been involved in the “long oil/short natural gas trade.” Because of this, the market is likely to see a lot of volatility, but I still believe that there is a major problem with the oversupply of natural gas, at least in the meantime. I do believe that even if this market was to start rallying from a longer-term move, there will be several opportunities to short.

NATGAS Video 11.03.20

The 50 day EMA has been technically resistive during the trading session, and as a result it’s likely that the technical traders have started to sell again. At this point, the $2.00 level above is massive resistance as well. That being said, we will have to watch what goes on in the oil markets because if they continue to crash, that may fuel more short covering in this market. At this point, it’s only a matter of time before sellers come back in, the question is whether or not it happens today or tomorrow? I’m looking for some type of exhaustive candle to start shorting, something that I don’t have on the daily chart quite yet.

If we were to break above the two point to zero dollars level on a daily close, then we are probably going to go looking towards the $2.20 level, before pulling back from there as well as it would attract the attention of the 200 day EMA. All things being equal, I am still bearish of natural gas, but I realize that an oversold situation can cause massive rallies.