Natural Gas Price Forecast- natural gas markets testing support

Natural gas markets were volatile during the day on Thursday, as we were awaiting inventory figures. They did come out a little higher than expected, and therefore we broke down below the vital support level initially, but it seems as if the market is still respecting the level.
Christopher Lewis
Natural gas daily chart, September 21, 2018

Natural gas markets went back and forth during trading initially on Thursday, but as the report came out a little bit bearish, the market broke down through the $2.90 level, only to turn around and see massive buying. Looking at the chart, it’s obvious that the $2.90 level is important, and now that we have turned around to form a long tailed hourly candle, I believe that if we can break down below that tale, then the market will unwind to the $2.85 level. Longer-term, we have been consolidating for some time between the $2.95 level and the $2.75 level, with $0.05 worth of width after that. Ultimately, this is a market that is going to be contained within the longer-term range, and quite frankly we had gotten a bit ahead of ourselves. However, it looks like the buyers are quite ready to give up so it’s very likely that we will see tenacity. While I believe there will be a selling opportunity rather soon, it may be closer to the $2.95 level.

It’s not that I can’t see a scenario where I would buy natural gas, it’s just that we are way to elevated at this point to do so as it would be chasing the trade and I think the risk to reward ratio isn’t quite there to make taking that side of the phrase very palatable. All things being equal, I think that if you are a buyer you need to be looking for value more than anything else. This time of year does tend to be bullish though.

NATGAS Video 21.09.18

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