Natural Gas Price Forecast – Natural Gas Markets Gapped Lower

Natural gas markets have gapped lower to show signs of weakness as natural gas markets are still oversupplied. All things being equal, this is a market that I think you continue to sell every time we show signs of exhaustion after a short-term rally. Because of this, I would be a seller short-term spikes, especially if we turn around and try to fill the gap that we just created at the $2.60 level.

NATGAS Video 16.03.21

To the downside, the $2.40 level starts a $0.10 support region that if it gets broken below, the market is probably going to fall apart. At that point in time, I suspect that the market is probably going to go to the $2.00 level, possibly even the $1.80 level after that. This is a market that is going to have to deal with the springtime temperatures rising, despite the fact that the next few days are going to be cold in the northeastern part of the United States. After all, we are at the very end of the cold season, so therefore it drives down the idea of demand. Because of this, the cyclical trade comes back into play, therefore I like the idea of shorting every opportunity we get.

The $2.80 level is resistance, not only due to the fact that we have seen selling there, but the fact that we have seen the 50 day EMA slicing through. Above there, the $3.00 level would be massive resistance but at this point I think it might be a bit of a stretch to try to get to that level.

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