Natural Gas Price Forecast – natural gas markets drift lower on Monday
The natural gas markets drift a little bit lower during the trading session on Monday, reaching down to the $2.90 level. That’s an area that of course attract a lot of attention as it is a large, round, psychologically significant number. The market certainly seems to have a bit of a “ceiling” in the market at the $3.00 level. I think at this point we are little bit oversold though, so expect some type of bounce. That bounce should be a nice selling opportunity though, and at the first signs of exhaustion, I would be a seller. However, if we were to turn around to break down below the $2.88 level, that would be a very negative sign and unwind the market to the $2.85 level.
If we did turn around and break above the $3.00 level, then it would show significant strength again, but we have recently made a couple of “lower highs”, which of course is the very essence of negativity. I think that overall, we are starting to see that natural gas certainly seems to have a bit of a longer-term ceiling and it just above. Expect volatility, but if you have ever tested the waters in this market, then obviously you are used to this and you expect the massive swings that we have seen. This is a market that is very difficult to hang onto for the longer-term, so focus on a range bound market with a bit of a negative bias in the short term.