Natural Gas Price Forecast – Natural Gas Markets Continue Sideways Action

Natural gas markets have rallied ever so slightly during the trading session on Wednesday as we continue to simply go sideways overall, as we have been forming a larger rectangle for quite some time. The 200 day EMA above is sitting at the $4.09 level, which is an area that could cause some issues. Furthermore, the 50 day EMA is reaching towards the 200 day EMA, threatening the so-called “death cross” that a lot of longer-term technical traders will pay close attention to.

NATGAS Video 06.01.22

Looking at this chart, it is very obvious that we had broken down through significant support levels more than once, and it certainly looks rather bearish. That being said, the $3.50 level underneath should continue to offer support, so if we can break down below there it would kick off a much bigger move to the downside. At that point, I would anticipate that we go looking towards the $3.00 level, which is not only a large, round, psychologically significant figure, but it is also the so-called “measured move” of the breakdown from the triangle that we have recently broken through.

Furthermore, the $3.00 level is an area where the market has been comfortable more than once, and therefore makes a certain amount of sense that it could act as a bit of a magnet for price. If that is going to be the case, then everything lines up quite nicely, especially considering that the temperatures in the United States are much warmer this time of year than usual, meaning that demand is certainly falling off of a cliff. With this, I continue to fade short-term rallies that show the slightest hint of exhaustion.

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