Natural Gas Price Forecast October 10, 2017, Technical Analysis

Natural gas markets initially gapped lower at the open on Monday, but then turned around to show signs of resiliency again. We break down below the $2.85 level, which is a negative sign. It looks as if we are going to continue to see selling pressure, perhaps trying to send this market towards the $2.75 level underneath. Given enough time, I think we’re going to do just that, so I like selling rallies as they appear on short-term charts. Ultimately, I have no interest in buying natural gas, because it is proven itself to be far too heavy to continue to the upside for any real length of time. Because of this, short-term charts are preferred, and at the first signs of weakness I think you can start shorting natural gas.

If we were to break down below the $2.75 level, the next target would be $2.50, but it’s going to take a long time to get there. After all, this is the coldest part of the year we are heading towards in the United States, and that of course should bring up demand. However, the oversupply is such that the demand won’t come anywhere near wiping it out. We are going to have a market that is being pushed and pulled violently in both directions, but overall the longer-term trend is to the downside, so that is by far the easiest direction to trade. I believe that there is a massive ceiling in this market that extends above the $3.00 level, as there are a lot of natural gas producers in the United States to become profitable above that level. Because of this, the market start selling off every time we get there as producers are more than willing to send massive amounts of supply into the marketplace.

NATGAS Video 10.10.17