Natural Gas Price Forecast – Tropical Depression Sparks Short CoveringNatural gas markets rallied a bit during the trading session on Friday, as a tropical depression in the Gulf of Mexico has traders short covering. We are sitting just below the 50 day EMA and resistance though.
Natural gas markets initially fell during trading on Friday but turned around to show signs of support and life as traders covered from short positions due to a tropical depression in the Gulf of Mexico. We still have the same lines of support and resistance as before, with the $2.20 level being massive support and the $2.40 level being massive resistance. I would also point out that there are couple of inverted hammers down at the $2.20 level which of course been broken to the upside is a very bullish sign. With that in mind, the 50 day EMA is just above, and it is more than likely going to be tested and potentially broken above.
NATGAS Video 21.10.19
A move above there opens up the door to the $2.54 level, which is where the 200 day EMA sits. Beyond that we could be looking at the $2.70 level which is the latest swing high. I like the idea of buying on a break out, if and when we get it above the $2.40 level. In the meantime, it’s very likely that we simply go back and forth in this $0.20 range, as the market tries to build up some type of base and figure out what it wants to do for the winter. Historically speaking though, we should take off to the upside rather soon and therefore it will probably be based upon some type of weather report. With that in mind I patiently wait for an opportunity to play the break out but recognize that short-term traders may continue to go back and forth.
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