Natural Gas Price Forecast – Natural gas markets give up gains

Natural gas markets tried to rally during most of the day on Tuesday but have struggled at the 50 day EMA. By forming a bit of a shooting star, it’s likely that we could turn around and fall. The $2.60 level should offer a bit of support, but if we can break back below that level, it’s very likely that the market will go much lower and perhaps reaching towards the $2.50 level.

NATGAS Video 15.05.19

Alternately, if we can break above the $2.70 level, then I think the market will probably move towards the $2.90 level over the longer-term. That’s an area that should be extraordinarily resistive, so I would not only be short at that area, but I would be aggressively so. We are in a downtrend for reason, simply put the natural gas supply is so far oversupplied that we are years away from any significant destruction of the supply.

If we break down below the $2.50 level, natural gas could break down towards the $2.25 level rather quickly. At this point, it looks as if we are running into significant selling pressure, so I do like the idea of shorting this market on short-term rallies that show signs of exhaustion. As far as buying is concerned, I would perhaps think about it above the $2.70 level but I would be very cautious at that point. The first sign of trouble, I would get out of the market as we are most certainly in a negative environment.

Please let us know what you think in the comments below