Natural Gas Price Forecast – Natural Gas Reach Towards Previous Consolidation

Natural gas markets have fallen a bit during the course of the trading session on Wednesday to reach down towards the $2.95 level, the epicenter of the previous consolidation area before we broke above the $3.00 level. At this point, if we can break down below the $2.90 level, then it is likely that the market goes looking to fill the gap underneath, something that I have been calling for over the last several weeks. The 50 day EMA could cause a little bit of noise, but at the end of the day I do think that we probably go looking to fill that gap.

NATGAS Video 20.05.21

The reason I like the idea of filling the gap is that temperatures in the United States are starting to warm up, but not so hot that it causes a massive need for air conditioning. Yes, commodities have gotten a massive shot higher in general, and of course natural gas has gotten a bit of a benefit from the overall bullish attitude. All things been equal, I think this market eventually breaks down due to the cyclical trade, but obviously we need to clear that support underneath. For what it is worth, the gap extends all the way down towards the $2.68 level, and then of course the bottom of the overall consolidation area extends down to the $2.45 level underneath. I do think that we get there eventually, but this is going to be a very noisy and choppy affair. I have been looking for selling opportunities based upon exhaustion, which it looks like we are about to see.

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