Natural Gas Price Forecast – natural gas markets slump on Tuesday

Natural Gas markets rallied initially during the trading session on Tuesday, reaching towards the $2.97 level. However, the market has pulled back from there to show a lot of weakness. This jibes well with my overall thesis of longer-term consolidation in this market. The $2.97 level is very resistive extending to at least the $3.00 level, an area that is profitable for fracking companies in the United States. Because of this, I believe that the market will continue to try to reach to higher levels, but then continue to fail.

On the downside, we could go as low as $2.70 and remained within the consolidation, so I think at this point there is much more risk to the downside than the upside. However, if we did rally significantly the market could go as high as $3.40 as it had over a year ago. That was a one-off phenomenon though, so I don’t know that it gets repeated this year.

Overall, expect a lot of volatility in the market but then again that’s what natural gas offers. As a short-term traders type of environment but you should pay attention to the longer-term range, as the suppliers and buyers of large amounts of contracts dance around that area. For the average day trader, those areas are going to be difficult to overcome. However, that’s one of the great things about this market, we have clear boundaries that we can follow if you are patient enough to wait for the trade to set up.

NATGAS Video 22.08.18