Natural Gas Price forecast for the week of January 15, 2018, Technical Analysis

I believe that natural gas markets continue to show a lot of volatility, and with a bullish candle that we formed for the week, this certainly favors the upside at first glance. However, when you look at the overall consolidation area, there is a significant amount of resistance above. It’ll be interesting to see how this plays out, but right now I would be very hesitant to start buying as the natural gas markets have been pummeled every time they tried to rally. I think it’s only a matter of time before the sellers return, but you can see that I have a red line drawn on the chart at the $3.40 level, and a break above there should send this market to the much higher levels that we reached in December 2016.

The choppiness tends to favor daily charts, if not 4-hour chart. It will be difficult to trade this from the weekly chart, but I think it gives you an idea of just how volatile and explosive this market can be, in both directions. I believe that the oversupply natural gas will eventually overwhelm the buyers, and it is not lost on me that the market typically peaks somewhere in January. Because of this, I will be drilling down to the daily charts to trade the longer-term aspect. Ultimately, this is a market that should continue to be choppy, but as we have gotten overbought, it’s likely that we will eventually drop towards the $2.75 level.

NATGAS Video 15.01.18