Natural Gas Price Forecast – natural gas volatile and negative on Tuesday

Natural gas markets initially tried to rally during the day on Tuesday, reaching towards the $2.78 level, an area that has been supported in the past, so it’s not a huge surprise that its resistance now. I believe that natural gas markets are ready to extend the lower levels.
Christopher Lewis
Natural gas daily chart, July 18, 2018

Natural gas markets were volatile during the trading session on Tuesday, reaching towards the $2.78 level, an area that has offered support recently. The fact that the market rolled over there is not a huge surprise, mainly because we have such a huge oversupply of natural gas out there, and of course the rising US dollar puts downward pressure on most commodities anyway. The $2.74 level has been short-term support, but I don’t see anything major there to keep the market afloat. It makes more sense that we go down to the $2.70 level, and then test that major support level.

A break down below that area would allow the market to reach towards the bottom of the overall consolidation area, which I see as the $2.60 level as it was the bottom of the longer-term trading range that the market has been in. If we were to turn around and break below the $2.60 level, that would be a catastrophic event for the natural gas markets. I don’t anticipate that happening, but I do expect that the market will go down to that area to test that level, because it is simply far too interesting of a target. I believe that rallies at this point are to be sold and have no interest in buying this market anytime soon as it is showing its longer-term proclivity to drift lower. Look for exhaustion, then get involved in this trend.

NATGAS Video 18.07.18

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