Natural Gas Price Forecast – natural gas markets drop on MondayNatural gas markets fell again on Monday, as we continue to grind lower. The market of course has very well-defined barriers, and as we are approaching the bottom of the longer-term consolidation, I suspect that the selling pressure only has so much farther to go.
Natural gas markets drifted a bit lower during the early hours on Monday, testing the $2.75 level. The major support level below at the $2.70 level has been the scene of a lot of buying over the last several months, so I suspect that this point there is probably somewhat limited downside. If you are short-term trader, then you’re looking for short-term rallies to sell that show signs of exhaustion. However, if you are looking to place a trade for a little bit bigger move, you should be aware of the $2.70 level and its natural proclivity to bring in a lot of buyers.
At that point, you could see a return to the $3.00 level, which could light up quite nicely with the seasonality of natural gas as well, as futures markets are starting to look at some of the colder months in the United States. That’s not to say that you can simply buy here and hang on, far from it. What you need to see is some type of supportive daily candle in order to put money to work like that. In the short term though, scalping this market to the downside should continue to work, and I think that the $2.80 level will offer a bit of “ceiling” at the moment. The $2.75 level is minor support, so a bounce from there isn’t a huge surprise if it happens, but it should be temporary and an opportunity to start selling again.