Natural Gas Price Forecast – Natural Gas Markets Find Support

Natural gas markets have fallen a bit during the trading session on Friday, reaching down towards the 200 day EMA. We have bounced from there, and this of course is something worth paying attention to due to the fact that the longer-term traders out there will pay quite a bit of attention to. Ultimately, the fact that we formed a bit of a hammer suggests to me that we are going to see a bit of a bounce, and it should be worth noting that Goldman Sachs has set a target price this winter of $3.25 during the day. This could be part of the reason why traders have jump back into the market, but at this point in time I think the cyclical trade makes quite a bit of sense anyways.

NATGAS Video 07.12.20

If we were to turn around a break above the $2.60 level, reaching towards the $2.80 level. If we can break above there, then the next target is the $3.00 level. This is a market that will see a lot of demand going forward for the next month or two, due to the fact that colder temperatures are heading towards the northeastern part of the United States. Granted, we have seen less of a drawdown than anticipated. Nonetheless, we will start to see temperatures drop thereby driving up demand. This is a cyclical trade that should last until about the middle of January, where we would see the market start to focus on spring contracts. If we were to break down below the 200 day EMA though, at that point I would abandon the idea of buying natural gas for the winter.

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