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Natural Gas Price Forecast – natural gas gaps lower to end year

By:
Christopher Lewis
Updated: Dec 31, 2018, 16:59 UTC

Natural gas markets gap lower to kick off the trading session on New Year’s Eve, but as you can see we did go much lower than that. There is a significant amount of support just below, and I think at this point it’s likely that the market will try to fill the gap.

Natural gas daily chart, January 02, 2019

Natural gas markets gapped lower to kick off the New Year’s Eve trading session, reaching down towards the $3.05 level. The $3.00 level underneath should be massive support, and therefore wouldn’t be surprising at all to see this market turned around and try to fill the gap. That gap is substantial, perhaps all the way to the $3.25 level. I think that the $3.00 level is of course psychologically important, and I think it will attract a lot of volume. Part of the gap lower could have been due to thin liquidity, as it was New Year’s Eve, and although I am very bearish of this market I think selling at this point is probably pushing your luck. I think at the very least we need to fill the gap, or perhaps even go looking towards the $3.50 level.

NATGAS Video 02.01.19

Look for rallies that show signs of exhaustion that you can take advantage of. If you get one, don’t hesitate to take advantage of it, because you certainly have the force of the market with you. The area that we are trading in now is essentially “fair value” according to trading action over the last year or two, so therefore I think it makes sense that we continue to hang about in this area. Liquidity probably won’t pick up for a few trading sessions, so keep that in mind.

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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