Natural Gas Price Forecast – natural gas markets still flat

Natural gas markets tried to rally during most of the day on Thursday but got turned around as we are essentially hanging about the $3.00 level with no real momentum.
Christopher Lewis
Natural gas daily chart, January 11, 2019

Natural gas markets continue to be relatively flat, as we hang around the $3.00 level. I think at this point, the market looks very likely to make an explosive move soon, but I also believe that the directionality is probably to the upside, albeit for short-term. The 20 day EMA is close to the $3.32 level, and of course there is a gap above that still needs to be filled. Because of this, I expect a move towards the 20 day EMA, but so far we have not been able to make that move. Once we do, I think at that point looking for signs of exhaustion would be the way to go. At that point you can sell and pick up a little bit of real estate on the weight lower.

NATGAS Video 11.01.19

There is the possibility that we just break down from here, but I don’t like that trait as we are so overextended to the downside. If we get that move, then we should go to the $2.75 level, perhaps even the $2.50 level. At this point, I think that this is a one-way situation: you sell short-term rallies that show signs of exhaustion near the $3.30 level. I have no interest in shorting here, the risk to reward ratio is rather ugly if you do get a lower move. I also believe that there is resistance all the way to the $3.50 level, which is important also. Overall, I have no interest in buying this market because there is no fundamental reason to think that we will slice through supply that quickly.

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