Natural Gas Price forecast for the week of December 11, 2017, Technical Analysis

Natural gas markets have formed a nasty looking candle for the weekly chart, closing just above the $2.76 level. We are sitting on top of massive support though, and that support extends down to the $2.50 level. While the candlestick is very bearish in general, I believe that the market will also be paying attention to the weather reports out of the northeastern part of the United States, which are starting to go colder. There is a certain amount of overhang when it comes to supply, but that’s nothing new. The market has been trending in this general range for most of the year, and if anything, I believe that the buyers will probably become aggressive at the first signs of cold weather as they typically do this time of year.

At this time last year, we had the market explode back to the $3.90 level, which of course was the absolute top of the year as temperatures were cold. If we get a repeat of this weather pattern, and there’s no reason to think we won’t, it’s only a matter of time before the buyers return. However, be small with your trading position, as the volatility in the natural gas market should continue to be a major issue. I believe that the $2.50 level is essentially the “floor” in the marketplace, and if we were to break down below there it would be absolute chaos in a major catastrophe for the commodity. It is because of this I think we will see the buyers return sooner rather than later. Regardless, it’s going to be a wild ride as it typically is.

NATGAS Video 11.12.17