Natural Gas Price Forecast – Natural Gas Markets Attempt Stabilization

Natural gas markets fell initially during the trading session on Wednesday, but then bounced from the $1.80 level yet again. This is an area that has been rather supportive over the last couple of weeks, and it should be thought of as an area that could be potential support based upon recent action and longer-term charts. Furthermore, the market does tend to move and $0.20 increments, so that of course is something that should be paid attention to as well. However, the market is most certainly in a downtrend and therefore balances are more than likely going to continue to offer selling opportunities.

NATGAS Video 06.02.20

The $2.00 level above is the initial range of resistance, and then of course the 50 day EMA which is currently trading at $2.12 should offer resistance as well. Furthermore, the $2.20 level will offer another reason for selling as well. I would like the idea of a rally that fails to have any follow-through to get involved and start selling again. Quite frankly, the supply of natural gas continues to be a major issue for the industry, as bankruptcies loom. These bankruptcies will be “creative destruction” in the industry in order to drive prices higher again. However, this is something that is going to take a long time to affect the market overall, so I still look at the idea of fading rallies as the best way to trade natural gas going forward. If the market breaks down below the $1.80 level then it will go looking towards the $1.60 level below.

Please let us know what you think in the comments below