Natural Gas Price Forecast – Natural gas markets rally towards vital level

Natural gas markets rallied significantly during the trading session on Monday, breaking above the 50 day EMA. By breaking above there, it is a bullish sign but we still have the 200 day EMA above that can come into play as well. Because of this, I fully anticipate that the natural gas markets will probably see a bit of selling pressure near the $2.70 level, and therefore roll over to reach down towards the $2.60 level. If we break above the 200 day EMA, that could send the market towards the $2.75 level, so I do believe that there is an opportunity to start selling given enough time.

NATGAS Video 21.05.19

That being said, to the downside I think we could go as low as $2.60, as we continue to see an oversupply of natural gas around the world. Ultimately, this is a market that should continue to see negativity but we may be in the midst of a short covering rally. Signs of exhaustion will be taken advantage of, because quite frankly we are in the wrong time of year to expect this market to see a lot of buying. After all, the demand can be strong, but quite frankly we are in the middle of drilling season, so at this point I suspect that it’s only a matter time before we roll over again. Having said that, if we break above the $2.75 level could open the door towards the $2.90 level above, which extends to the $3.00 level. All things being equal though, it’s easier to simply sell signs of weakness.

Please let us know what you think in the comments below