Natural Gas Price Forecast – Natural Gas Markets Challenge 50 Day EMA

As you can see on the chart, I have a line at the $2.80 level, which I believe has offered significant resistance and could be part of a “ceiling in the market” heading into the springtime. That being said, I do not necessarily think that it is a brick wall, and we may have to challenge it multiple times in order for sellers to truly take control. Regardless, I have no interest in buying natural gas because quite frankly this is the wrong time of year to get excited about it.

NATGAS Video 28.01.21

Demand will be dropping off and we are already trading the March contract. That of course is when temperatures start to warm up in the northern hemisphere, thereby driving down the demand for natural gas overall. Beyond that, we also have an oversupply of natural gas although Joe Biden did put a moratorium on new drilling on federal lands in the United States, we still have more natural gas in America alone that we know what to do with. This of course provides a natural ceiling because as long as there are people willing to drill natural gas, there will be plenty of it.

To the downside, I believe that if we can break below the $2.60 level, then we will go looking towards the 200 day EMA and then eventually the $2.30 level. Longer-term, I believe that we are likely to see an attempt to get down to the $2.00 level, but obviously we are going to get there overnight. I continue to sell short-term rallies that show signs of exhaustion, it will be waiting for an opportunity somewhere in this area or slightly above to start selling again.

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