Natural Gas Price Forecast – Natural Gas Markets Continue to Struggle

Natural gas markets have rallied a bit during the course of the trading session on Wednesday to reach towards the $3.90 level, but still seems to be hesitant to attack the $4.00 level. This makes quite a bit of sense considering that the temperatures in the United States are much milder than anticipated, and of course we have a serious oversupply of natural gas from a longer-term structural standpoint.

NATGAS Video 16.12.21

The 200 day EMA sits at the $4.14 level, and therefore you need to pay close attention to that technical indicator that will have such a large influence on so many traders. With this being the case, I think is probably only a matter of time before the sellers come in and punish any type of rally. I believe that the highs have been made for the winter, which at this point is not much of a stretch. The absolute “ceiling in the market” currently is near the 50 day EMA, although I think it is going to take a while for that ceiling to get down here.

In other words, any time this market rallies, you should be looking for an opportunity to start shorting it. I do not have any interest at this point in time in trying to get too cute with this market, it is simply a bearish market that catching a falling knife is a great way to lose money in. If it gets expensive, I will short it at the first signs of exhaustion.

For a look at all of today’s economic events, check out our economic calendar.