Natural Gas Price forecast for the week of February 19, 2018, Technical Analysis

The natural gas markets have broken down a bit during the week, showing signs of a roll over yet again. However, the $2.50 level underneath is massively supportive based upon previous action, and we are most certainly a bit overdone. I think that the market showing this type of volatility has spooked a lot of traders out of the contract, so I think a little bit of a short covering rally could present itself. However, I would not be buying this market at all, even if we bounce significantly. The higher we go, the more interested I am in shorting this market, and will do so at the first signs of exhaustion. I would probably use the daily charts to make my longer-term entrance though, as it will give you a better opportunity to fine-tune your trade.

The alternate scenario is that we break down below the $2.40 level, which would be the bottom falling out of the natural gas markets. I am reading headlines that 2018 may be the year that we break all records in the United States drilling for natural gas, so oversupply isn’t much of a question, it’s just a question of how drastic is it? Ultimately, I think that buying this market is impossible, and reckless to say the least. Short-term traders may try to time the market, but the longer-term trader should recognize that buyers simply cannot hang on to gains for any length of time.

NATGAS Video 19.02.18