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Natural Gas Price Forecast – Natural Gas Markets Gapped Lower

By:
Christopher Lewis
Updated: Dec 28, 2020, 17:11 UTC

Natural gas gapped lower on Monday in thin trading. I have been hoping for a move to the upside to start selling, but it is clear we are done for the winter.

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Natural gas markets have gapped lower to kick off the trading session on Monday in what would be very thin volume. Ultimately, I think this is a market that continues to see a lot of volatility, lease for the next couple of days. I had hoped for a bounce higher to start shorting from for the spring trade, but the temperatures in the United States are not cooperating, and therefore it looks as if the natural gas markets may not get that final push higher towards the $3.00 level that I wanted to take advantage of for a longer-term short position. At this point, I suspect that the gap from the open will probably get filled, and then I will look for an exhaustion candle on the daily chart to start shorting.

NATGAS Video 29.12.20

To the downside, the most obvious target would probably be the $2.00 level, an area that of course is a large, round, psychologically significant figure and has also offered significant resistance. At this point, I believe this market will start to become a bit more difficult, so I think you are going to have to simply see some type of rally that fills this gap and therefore it sets up an obvious sell signal. This is also important now that we are below the 200 day EMA, which sits at the top of the gap, roughly speaking. That being said, I think that we are setting up for or the springtime already, which is a bit surprising.

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About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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