Natural Gas Price Forecast – Natural Gas Markets Drift Lower

Natural gas has fallen a bit during the trading session on Thursday, reaching down towards the $2.33 level midday. Ultimately, this is a market that I think is going to go looking towards the $2.20 level, based upon the fact that we had gotten far ahead of ourselves, and need to pullback in order to build up momentum. Remember, a lot of the push higher was based upon fear of the hurricane that was coming but failed to shut down production more than a few days.

NATGAS Video 11.09.20

That being said, we are starting to go into colder months, so I do think that there is still some buoyancy in this market, and that is something that you need to pay attention to. The 50 day EMA sits at the $2.23 level, so that adds a little bit more credence to the idea of $2.20 offering support, beyond the fact that there is structural noise there as well. Ultimately, I do think that this is a market that will find plenty of buyers, but we need to be patient and wait for value to reenter the marketplace. If you were watching my analysis yesterday, I did tell you that I was going to place my next trade based upon a supportive daily candlestick, something that we have clearly not had yet.

When markets become volatile, you need to look to the higher time frames to confirm what your trading idea is. At this point, I have not gotten anything other than more weakness, which is fine if you are a short-term seller, but after the massive move higher we have seen, I think that we would be very wise to simply wait for a better buying opportunity.

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