Natural Gas Price Forecast – natural gas markets explode to the upsideNatural gas markets shot up like a rocket during the trading session on Friday, not only taking out the highs from a couple of days ago but breaking above the resistance barrier that we have been paying attention to lately.
Natural gas markets have exploded to the upside, reaching towards the $2.85 level. What’s been even more impressive is that we not only reached that level, but we have broken above it. Obviously, now is not the time to jump in and trying to chase the trade. A short-term pullback should be a nice buying opportunities though, especially near the $2.83 level, or perhaps the $2.85 level. I think that chasing the trade up at these high levels would be very difficult. Markets don’t move in one direction forever, but certainly they should offer plenty of opportunities.
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If we broke down below the $2.83 level, then I think we would probably drop down to the $2.80 level next. However, I think that there is plenty of buying opportunities underneath, and that we will eventually go looking towards the $3.00 level, an area that has been massive resistance in the past. I look at this as a nice short-term buying opportunity on dips, but I will not hesitate to turn things around at the $3.00 level and start shorting as I anticipate that we are not ready to break out of the range quite yet. Interestingly enough, the EIA has announced that US natural gas production has hit a new record during the month of May. Because of this, I think it’s only a matter of time before the fundamentals get in the way, not just the technical resistance that we see above. We’ve been range bound for some time, so you should be able to take advantage of it.