Natural Gas Price Forecast – natural gas markets struggle on Friday

Natural gas markets have been very explosive as of late, with the $5.00 level above being massive resistance in the $4.00 level underneath being massive support. I think that the market will continue to bang around between those two levels, and as a result I think that the short term trade opportunities will probably be of the range bound variety, but I think the easiest way to go here is to simply short the market every time he gets a little ahead of itself. I don’t think we can break above the $5.00 level, but if we do it would blow this thesis out of the water.

NATGAS Video 03.12.18

As we start to focus on Spring contracts here in a few weeks, that should be the death knell of the rally as we start to look at demand which should of course drop once we get past the coldest months in the United States. Beyond that, I have to believe that suppliers are itching to sell at these exorbitant levels, simply because they haven’t seen these prices and so long. A break down below the $4.00 level will probably have the traders out there looking for $3.75, followed by $3.50 after that.

You could by pullbacks towards the $4.00 level, but I prefer to play this market a little more cautiously, shorting this overbought condition that we find ourselves in on rallies. Keep in mind that natural gas does tend to be very erratic this time of year, so be prepared to deal with volatility.