Natural Gas Price Forecast – Natural gas markets bounce from support

Natural gas markets bounced a bit from the massive support area underneath on Tuesday, but there is hardly any reason for major celebration. After all, we are at extreme lows so a bounce should have happened.
Christopher Lewis
Natural gas daily chart, May 08, 2019

Natural gas markets bounced a bit from the extreme lows of $2.50 during the day on Tuesday, showing signs of life yet again. This is an area that has been important for the long term, and as such it makes sense to consider it an area where buyers might step in, or at the very least sellers might step away. With that being the case it’s very likely that we continue to see a little bit of follow-through over the next 24 hours. Regardless, I’m looking at this as a potential opportunity to start selling a market that is quite frankly bearish and should remain so for the foreseeable future.

NATGAS Video 08.05.19

Natural gas markets have been beaten down quite significantly over the last couple of months, and that makes sense considering we are exiting the bullish time of year. However, the market is at extreme lows so one would expect a bit of profit taking or perhaps short covering. If we do break down below the $2.50 level, the market could sell off rather drastically, perhaps reaching down towards the $2.25 level after that. Keep in mind that the market is a bit oversold though, so it’s probably better to simply wait for rallies that show signs of weakness to take advantage of overbought conditions. In fact, it’s likely that will be the way to play this market until somewhere closer to the month of November when demand really start to pick up. Drilling season is upon us, and quite frankly natural gas is abundant.

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