Natural Gas Price Forecast – Natural Gas Gap Higher on Monday

Natural gas markets have gapped higher to kick off the week on Monday, slamming into the 50 day EMA. This is a technical indicator that of course attract a lot of people for a trend defining type of situation, so the fact that we are bumping up against the bottom of it suggests that we could see a bit of downward pressure. That being said, if you have been following me for a little while now you know that I am anticipating a rally that can be sold into. I suspect that we are getting close to it, and short-term traders may look to “fill the gap” in the short position. Otherwise, I would be looking at the $2.80 level as a potential selling opportunity as well.

NATGAS Video 05.01.21

Underneath, we have the 200 day EMA sitting near the $2.46 level, so I think it is worth paying attention to as potential support. I think that short-term, we will continue to see the occasional small rally, but that should offer selling opportunities due to the fact that we are not that far away from trading spring contracts, which of course features warmer temperatures coming out of the northern hemisphere. While we are not quite there yet, the reality is that we are getting closer. If that is going to be the case, then it is very likely that we will see selling pressure given enough time because demand will almost certainly fall.

With this, I think that the occasional short-term rally like this should offer the occasional short-term selling opportunity. Quite frankly, the higher we go, the more interested I am in selling.

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