Natural Gas Price Forecast – natural gas markets chop on Monday

Natural gas markets initially drifted down towards the $2.91 level before bouncing on Monday. The market ended up rolling over though later as the Americans were on board, and I think we are starting to see the first vestiges of selling pressure in this market. That being the case, I think that natural gas is going to offer a nice selling opportunity, and I think that the $3.00 level above continues to be massive resistance. I may not be willing to short quite yet, but I’ve deftly paying quite a bit of attention to this market.

Natural gas markets continue to be overbought at this point, and range bound from the longer-term perspective. I do not believe that the overall attitude or thought process of the market has changed, as the $3.00 becomes an area that fracking companies start making significant profit. As long as that’s the case, the market will be flooded with supply above that level. I believe that this is a nice risk to reward trade, but I would use the CFD market as opposed to the futures market, that way you can size your trade appropriately. To the downside, I anticipate we could go as low as $2.70, but obviously it can take a while to get there. Ultimately, if we break above the $3.10 level, then the market will have broken out and eliminated the range that we had been in for so long. I don’t think that’s going to happen, and therefore I’m looking for rallies to start shorting at the first signs of trouble.

NATGAS Video 14.08.18