Natural Gas Price Forecast October 27, 2017, Technical Analysis

Natural gas markets fell during the day here on Thursday, as we continue to see negativity in the overall pricing of the commodity. The $2.85 level underneath offered support though, so it’s not a surprise that we bounced yet again. This market should continue to consolidate in general, between the $2.85 level on the bottom and the $3.00 level on the top. A break above there should send the market a little bit higher, but only temporarily, as US fracking companies are quick to flood the market with supply as they become profitable above the $3 level. Because of that, I believe it’s only a matter of time before sellers return, as the markets simply cannot absorb all the extra supply.

If we were to break down below the $2.85 level, the market probably then goes to the $2.75 level, but it’s very unlikely that we go below there. If we did, the move would be to the $2.50 level, but I believe the volatility keeps this market bouncing around in this general vicinity. Because of this, and the fact that the $2.85 level has been so supportive I am going to wait for a rally towards the $3 level again that I can start selling. While I do recognize that we are range bound and we probably will go higher from here, quite frankly this is a market that’s easier to sell than by, because the fundamentals are so bearish. Patience will be needed to get the setup, which of course is much higher, so I am on the sidelines for the short-term, simply waiting for yet another opportunity to go short a market that cannot build up enough momentum to finally break out to the upside. I know there are colder temperatures coming to the United States, and that should support the pricing of natural gas, but quite frankly I don’t think that’s enough to make for a breakout.

NATGAS Video 27.10.17