Natural Gas Price Forecast – Natural gas markets rally

Natural gas markets rally during the trading session on Wednesday, perhaps in a move sympathetic to the crude oil inventory number which was a bit bullish. However, what’s more important is that we are at a technically supportive area so this could have been expected.
Christopher Lewis
Natural gas daily chart, May 09, 2019

Natural gas markets rally during the trading session on Wednesday, reaching towards the $2.60 level. This is the first of many levels that I think could offer a nice selling opportunity but as I record this video, the candle stick is closing towards the top of the range, so I will be cautious and simply wait for signs of exhaustion to start selling again. Yes, the $2.50 level has held so far and it is of course a significant support level on the longer-term charts, but obviously we are in a downtrend. Patience will be rewarded if you can allow the market to exhaust itself before selling.

NATGAS Video 09.05.19

If the $2.60 level doesn’t cause a roll over, I suspect that the 50 day EMA could. That’s closer to the $2.70 level, and for me that’s even better because it gives me much more room to run to the downside. The risk to reward ratio is simply much better from higher levels.

Beyond that, the $2.75 level will also offer resistance, and at this point I just have no interest in trying to buy natural gas. It’s the wrong time of year to expect extended rallies, because quite frankly the demand will be extraordinarily low. Beyond that, the storage of natural gas should continue to be strengthening, as drilling season is upon us. This is a market that is so oversupplied I can even put out a good visualization of what it truly looks like.

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