Natural Gas Price Forecast – Natural gas markets continue to fall

Natural gas markets fell a bit during the trading session on Wednesday as we continue to see weakness. There is a lot of seasonal weakness during this time of year, so it makes sense that we continue to drift lower.
Christopher Lewis
Natural gas daily chart, May 23, 2019

Natural gas markets broke down below the vital $2.60 level and did so with figure. Because of this, it looks as if we are going to drift towards the lows again, which I see as the $2.50 level. This is an area that I think will face a lot of support, and therefore I suspect that short-term sellers will flock to this market more than anything else. That doesn’t mean that we can’t profit, just that I’m not getting married to this position.

NATGAS Video 23.05.19

However, if we were to close below the vital $2.50 level could open up the door to the $2.25 level underneath. In fact, I think that there would be a significant acceleration of selling. Ultimately, this is a market that should only be sold, because quite frankly there is far more supply of natural gas out there on a longer-term basis than there will ever be demand. With this, I am a seller of rallies and it does look like the 50 day EMA, pictured in red on the chart, should continue to push this market lower.

If we did break above the $2.70 level, then we could go to the $2.90 level where I think there’s even more resistance based upon the 200 day EMA. Beyond that, there are also a lot of structural sell orders in that general vicinity as well. In fact, I believe that is only a matter of time before the sellers will return on short-term rallies, so keep it simple and simply look for exhaustion.

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