Natural Gas Price Forecast – Natural Gas Forms Massive Green Candle

Natural gas markets have rallied rather significantly during the trading session on Monday as traders came back to work. The 50 day EMA has offered technical support, as one would expect. Furthermore, there is a gap just above that continues to attract a certain amount of attention at the psychologically important $3.00 level, so paying close attention to what happens over the next couple of sessions makes quite a bit of sense. Having said that, I do believe that this market breaks higher given enough time based upon the fact that demand will pick up and we are trading the January contract.

NATGAS Video 01.12.20

Pullbacks towards the $2.80 level would be thought of as buying opportunities just as a break above the $3.07 level would be as well, leaving the gap behind. All things being equal, this is a market that should continue to see a bit of a cyclical push higher due to the time of the year. As temperatures drop, typically that will drive up demand. We still have a massive oversupply of natural gas in general, but this time year is thought of as overly bullish. I think at this point we will probably go looking towards the highs again, and then at that point in time we will probably start to see more downward pressure because by then we could be talking about trading a spring contract.

Having said that, there are a lot of weather reports between now and then that could roll more volatility into the market. Remember, natural gas tends to run on short-term weather reports more than anything else.

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