Natural Gas Price Forecast – Natural Gas Markets Break Trendline

Natural gas markets have broken down again, reaching towards the $1.60 level. Underneath, there is a significant amount of support extending down to the $1.50 level, and therefore I think it is only a matter of time before we find a certain amount of buying pressure to keep this market somewhat afloat. Quite frankly, the $1.50 level is a long-term support and resistance area that people have been paying attention to for ages, so I think it will continue to offer more the same. In fact, we have not even broken the idea of a “rounded bottom” yet. In other words, I think that the market still has plenty of buyers underneath but quite frankly it is an extremely negative candlestick that we are seeing for the Tuesday session to say the least.

NATGAS Video 17.06.20

Because of this, we need to see some type of supportive daily candlestick in order to start buying. If we were to break down below the $1.57 level it would of course be very negative sign but quite frankly I think that part of what we are seeing here is that the reemergence of the “spread trade” when traders will buy crude oil as it is going higher and short natural gas as it is going lower. This tends to exacerbate the entire situation. Ultimately, this is a market that does have a hard floor underneath it, at least from what I have seen. I will wait for a supportive daily candlestick to put money to work, which should set up a trade for Wednesday or Thursday at this point.

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