Natural Gas Price Forecast – natural gas markets break major support

Natural gas markets gapped lower to kick off the trading session on Monday, but then turned around to reach towards the $2.75 level. We found resistance there, and then fell again. At this point, it looks as if the market is oversold but quite frankly you can’t be a buyer of natural gas at these low levels, as we have broken through the major support.

NATGAS Video 05.02.19

That being said, the $2.50 level underneath is massive support as well, so I think that’s probably where we find buyers again. This is a market that will continue to see sellers but obviously we have gotten so oversold that it’s only a matter of time before buyers will come back in, or simply sellers will take profit. With that being the case, the market is likely to bounce rather soon, but I would not be a buyer of that bounce. In fact, I am waiting for some type of bounce that I can start to sell at higher levels.

The 20 day EMA is at the $3.00 level, so I think that is a very good candidate for a selling level if we get exhaustion in that region. If we can break through that level, then I think we get resistance at the $3.20 level as well above.

As far as selling is concerned, I simply can’t do it at this level because quite frankly it is extraordinarily overdone, and really at this point it’s simply foolish to try to chase the trade. You are either short of natural gas already, or waiting for a bounce to start selling.

Please let us know what you think in the comments below