Natural Gas Price Forecast – Natural Gas Markets Stabilize

Natural gas markets have gone back and forth during the trading session on Friday, as the $1.60 level continues offer significant support. That is an area that has been important more than once, so at this point I think that a bounce could be coming. That bounce is something that you should be looking to sell into though, because quite frankly this is a market that is very negative due to a massive oversupply issue, and of course the temperatures in the United States being warmer over the next several months. That will drive down demand, and of course drive down the ability for the markets to rally.

NATGAS Video 23.03.20

The $2.00 level above is massive resistance, but the 50 day EMA is currently trending lower at the 1.89 handle, which is a barrier that quite a few traders will pay attention to. Fading rallies continues to work until we get some type of bankruptcy situation in the United States or something to that effect, driving down supply. It’s very difficult to imagine that supply is going to suddenly dwindle in this type of environment. Add to all of that the fact that the coronavirus slowing down industry, and you can see how it’s difficult to imagine a scenario where suddenly there is going to be a huge spike in demand for natural gas by either industry or consumers. I think we are trying to find a bottom, and that bottom may even be lower but I’m much more comfortable fading rallies than trying to short all the way down here as we have gotten a bit overextended.