Natural Gas Price Forecast – Natural Gas Markets Get Hammered

Natural gas markets gapped higher to kick off the trading session on Thursday but then fell rather significantly to fill the gap and go even lower. At this point in time, the natural gas market is likely to continue to see more selling pressure, as we had gotten far too ahead of ourselves. The $3.80 level has offered a bit of a barrier over the last couple of days, so ultimately this is a market that looks as if it needs to pull back a bit in order to find reality again.

NATGAS Video 02.07.21

The market had gotten a bit parabolic, so the fact that we are pulling back makes sense from a gravity standpoint, but it also makes sense as the heatwave is starting to abate in North America. To the downside, the $3.40 level should be support as it was previous resistance. If we pull back, then the market is likely to find a certain amount of support there but breaking down below the $3.40 level would be rather negative for this market and could send it much lower.

The size of the candlestick for the trading session on is of course rather strong, so that does suggest a little bit of follow-through as well. Quite frankly, if you are long of this market already, it is probably advisable to take a little bit of profit as we have most certainly gotten a bit ahead of ourselves. All things been equal, based upon the consolidation area that we just broke out of, this market could go as high as $4.40, but quite frankly I think we are going to run out of fundamental “fuel” to make that happen.

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