Natural Gas Price Forecast – Natural Gas Markets Continue to Threaten the $2.00 Level

Natural Gas Price Forecast Video for 04.04.23

Natural Gas Technical Analysis

Natural gas markets have gapped lower to kick off the trading week, reaching down toward the $2.00 level. This is a large, round, psychologically significant figure that will continue to attract a lot of attention, and of course make a lot of headlines. However, I think at this point in time the market is trying to do everything it can do for some type of basing pattern. Natural gas at $2.00 is extraordinarily cheap, and on the lower end of what we normally see during warm months. In other words, it looks like the market has gone back into its previous pattern of the last several years.

With that being said, it’s very likely that the market will continue to see a lot of noisy behavior, but if we do rally from here, it’s obvious that we are in a bearish market. A short-term rally could be a small trading opportunity, but I certainly would not get overly exposed to the natural gas market on the upside. That being said, it is very difficult to imagine a scenario where I want to start shorting natural gas at this extraordinarily low level to begin with. The 50-Day EMA sits near the $2.78 level and is dropping. That could end up being a significant amount of resistance, so if we get to that area, traders will start looking for signs of exhaustion that they can start shorting. Just above there, the $3.00 level comes into the picture as well, and obviously there is a significant amount of psychological importance to a number like that. Furthermore, the market had pulled back from there previously, so it does suggest that perhaps we will continue to see a barrier in that vicinity.

Ultimately, the overall attitude of the picture that this chart shows is that we are still very negative, but also ever extended to the downside. On a rally to the upside that shows signs of exhaustion, sellers will more likely than not get involved and start shorting yet again. If we break above the $3.00 level, then we could get a much bigger move, but there needs to be some type of fundamental reason for the market to do so, something that doesn’t look very likely.

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