Natural Gas Price Forecast November 1, 2017, Technical Analysis

The natural gas markets initially tried to rally during the day on Tuesday, testing the $3.00 level. That’s an area that should continue to offer significant resistance, and by falling off the cliff, the market has now filled the gap that had formed several days ago. I think that it is likely we will continue to see volatility in this market, and I still believe in selling rallies. However, at this point the market has fallen far enough that I don’t have any interest in trying to short it from here. I suspect that it’s probably best to wait for the market to rally again and reach towards the $3.00 level to start selling. An exhaustive candle is exactly what I want to see after a rally, although short-term traders may be jumping in to take advantage of what should be support.

Warmer than anticipated temperatures in the short term in America should continue to put bearish pressure on the natural gas markets as demand shrinks. However, the market has to deal with the oversupply of natural gas regardless. Ultimately, I think that it’s not until we close above the $3.10 level on the weekly chart that I would consider buying this market as it would show a significant break out. Overall, this is a market that should continue to be choppy and noisy, but I am much more comfortable shorting than buying, that is more of a scalpers type of trade. I believe in going with the overall downtrend, and the overall fundamentals, while taking advantage of what has been an obvious structural pattern in the natural gas markets. By being patient, the easy trade presents itself in this market, as we have seen so many times over the last several months.

NATGAS Video 01.11.17