Natural Gas Price Forecast – Natural Gas falls to close out the weekNatural gas markets fell to close out the week, reaching down towards the $2.99 level. This is very interesting turn of events, because it ended up forming a nasty looking candle on the weekly chart.
Natural gas markets fell during the day on Friday, drifting down below the $3.00 level. The important $2.95 level underneath continues to offer potential support, but I think that if we break down below that level, it could change a lot as far as the outlook is concerned. This is because the weekly candle is now a massive shooting star, which of course is a very bearish sign. That could lead to a reclamation of the consolidation area, meaning that we could go as low as $2.70 underneath. That being said, keep in mind that we are starting to head towards colder months in the United States so there could be the seasonality effect of higher pricing coming. However, we may have gotten ahead of ourselves and therefore may need to make one more round trip in the consolidation zone.
The alternate scenario of course is that we turn around and rally towards the $3.05 level. Overall, I think we are looking at either consolidation in this small range or return to the $2.70 level. If we break down below the $2.95 level, that’s a clear signal for me. It certainly looks as if we are going to try it, and today could be a crucial day when it comes to what happens in the natural gas markets going forward. We know that natural gas does sell off rather rapidly, as it is a little bit more thinly traded than other markets such as crude oil or gold. Momentum could be on your side, if we get that break down. Otherwise, expect back and forth trading.