Natural Gas Price Forecast – Natural Gas Markets Gapped Lower

Natural gas markets have gapped lower to kick off the trading session on Monday, reaching down towards the $5.15 area before turning around to show signs of life. With that being the case, the market is likely to continue to see a lot of support in this general vicinity, if for no other reason than we have the 50 day EMA sitting underneath that is rising. Furthermore, were in an uptrend anyway so at the end of the day that is probably all that matters.

NATGAS Video 19.10.21

Looking at this chart, we could go looking towards the $5.50 level to fill the gap, and perhaps even the $6.00 level given enough time. I think at this point in time it is very likely going to continue to be very difficult to deal with, so what we need to keep in mind is that your position size will be crucial. If you can keep your position size somewhat small and only build once we get some type of confirmation, then you will do much better.

Clearly, you cannot be a seller of this market, as it is in such a huge uptrend. Furthermore, we have cold weather coming and that will increase the demand for natural gas going forward. I have no interest in shorting this market, at least not until we break significantly below the $4.00 level. We are more likely than not to see some type of a bounce in the short term, so I continue to look at it through that prism. Ultimately, I think this is a market that continues to be very noisy, but still has plenty of reasons to go higher in the short term.

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