Natural Gas Price Forecast – Natural Gas Markets Take Off On Tuesday

Natural gas markets have rallied significantly during the trading session on Tuesday, as we have broken above the $2.20 level. Furthermore, the market is threatening the $2.25 level, an area that is of course psychologically important. Furthermore, the 50 day EMA above at the $2.32 level should offer a significant amount of resistance. We are in a major downtrend and the temperatures in the United States have been warmer than anticipated this winter, thereby driving down the overall demand. That of course is negative for the marketplace. Furthermore, the Americans have drilled 17% more than the previous session, so having said that, this is a market that still will have a massive overhang.

NATGAS Video 15.01.20

At this point, there is a significant amount of support that extends from the $2.20 level down to the $2.00 level. At this point, there should be plenty of support in that area so therefore even if we do drift lower from here, I would probably ignore any selling opportunity. I am much more comfortable fading rallies that show signs of exhaustion. The 50 day EMA would be a good place to look, but then the $2.40 level should offer plenty of resistance as well. Simply put, the best way to trade this market is to wait for some type of massive spike to the upside and look for an exhaustive daily candlestick. We will more than likely get some type of spike this winter, due to perhaps a couple of massive storms, but then we run into the major problem of temperatures warming in the northeastern part of the United States and that will drive down a significant amount of demand. Fading rallies continues to work, as we have seen all winter.

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