Advertisement
Advertisement

Natural Gas Price Forecast – Natural Gas Markets Rally Significantly

By:
Christopher Lewis

Natural gas markets rallied significantly during the trading session on Thursday as traders came back from Christmas. That being said though, we still have a lot of work to do before we see buyers take over.

Natural Gas Price Forecast - Natural Gas Markets Rally Significantly

Natural gas markets rallied significantly during the trading session on Thursday, bouncing from the $2.20 level. Ultimately, this is a market that should continue to go higher in the short term, but I also recognize that the 50 day EMA at the $2.40 level is going to continue to cause a significant amount of resistance. Ultimately, this is a market that will continue to struggle overall, as the Americans drilled 17% more this past year than the year before. Ultimately, if we do break above the 50 day EMA that might be the beginning of the “winter pop” that I have been waiting for. However, the market has been very skittish when it comes to hanging onto gains, so at this point it’s unlikely to see a lot of confidence entering this marketplace. Ultimately, the market seems to be holding onto massive support at the $2.20 underneath, so if we were to break down below there the market could go as low as the $2.00 level.

NATGAS Video 27.12.19

Having said that, I think the easiest trade is to fade this market on signs of exhaustion. Ultimately, I believe that the market is oversold, but given enough time we should see this market fall apart and start being shorted again at higher levels. Ultimately, this is a market that is still dealing with massive amounts of oversupply, and as a result it’s difficult to imagine that this market will suddenly become bullish for more than quick short-term trades. Ultimately, this is a market that will continue to stay negative longer-term.

Please let us know what you think in the comments below

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

Did you find this article useful?

Advertisement