Natural Gas Price Forecast – Natural gas markets run into exhaustion

Natural gas markets initially tried to rally during the trading session on Friday but gave back the gains to end up forming a bit of a shooting star. Ultimately, this looks as if we are ready to break down a bit and return to the downtrend but keep in mind there will be a lot of volatility. Ultimately, I am a seller of all rallies as I do not trust any strength in this commodity. It is simply far too oversupplied.

NATGAS Video 01.07.19

The $2.30 level being broken to the downside is a good sign to start selling again, perhaps reaching down towards the $2.20 level. The $2.40 level above is massive resistance, so if we were to break above that could go looking towards the 50 day EMA which is pictured in red on the chart before we see sellers again. Above there, the $2.50 level will of course be interesting as well, as it is a large, round, psychologically significant figure.

I still believe that the $2.00 level underneath will be targeted, but it may take some time to get there. I think that might be a goal for late this summer, especially if we start to get some type of global slowdown. After all, demand will only slump if factories slowdown. All things being equal though, I think that this market is one that you can’t buy, at least not until we start talking about November, possibly even later than that. I like the idea of fading rallies and the fact that we are forming a shooting star on Friday tells me that we may get another shorting opportunity.

Please let us know what you think in the comments below