Natural Gas Price Forecast – Natural Gas Markets Run Into Resistance

Natural gas markets initially tried to rally during the trading session during the day on Monday but found the $2.00 level to be far too resistive to continue going higher. That being the case, the market looks likely to continue to struggle to get above there for a significant move, but it certainly looks as if it is finding buyers underneath, so it is possible that we could see this market turn around and try to break out to the upside but there are a whole plethora of reasons to worry about trouble above.

NATGAS Video 05.05.20

The first one is the obvious $2.00 level, an area that should continue to cause a lot of psychological resistance. Furthermore, if the market were to break above the $2.00 level it has a significant amount of resistance extending to the $2.10 level, based upon the previous trading action. If we can clear that level, then it is likely that we go looking towards the 200 day EMA above. The 200 day EMA is a massive technical indicator that will attract a lot of attention, so clearing that could kick off the longer-term uptrend.

While there is still significant oversupply out there, the reality is that there are going to be a ton of bankruptcies in the natural gas sector, and that will bring down supply eventually. At this point, traders will probably try to “front run” that wave of insolvencies. The trick of course is to time that move correctly, something that is not easy to do. In the short term, it looks like we may pull back towards the $1.85 level where the 50 day EMA sits.