Natural Gas Price forecast for the week of March 5, 2018, Technical Analysis

Natural gas markets rallied slightly during the week, showing signs of life again. The market is at the bottom of the overall consolidation area that I have marked on the chart, so it would not surprise me at all to see a bit of a bounce. We have been oversold for a minute now, so it makes sense that a bounce to the $3.00 level would happen at the very least. However, I believe that the downward pressure should continue, perhaps after a significant bounce. That is an opportunity to take advantage of what has been a very negative trend longer term. I believe that at this point, the oversupply of natural gas will continue to be a significant issue, and I think that the oversupply is probably going to get worse before anything else.

If we were to break down below the $2.50 level, this market could be very negative, perhaps breaking down rather rapidly to the $2.00 level. However, I think that’s very unlikely, I suspect that this is a market that will continue to find sellers on rallies, and that’s exactly how I am going to treat this market. I have no interest in buying, because I recognize that any point we will start to focus on the oversupply again. Even if we break above the $3.00 level, I think that will only make it more likely to find sellers also. This market continues to be noisy but offers plenty of opportunity if you are patient enough.

NATGAS Video 05.03.18