Natural Gas Price forecast for the week of October 2, 2017, Technical Analysis

Natural gas markets continue to be very tough for longer-term traders, as we continue to dance around the three dollars level. We did break above there during the week, but then turned right back around and form a candle that looks somewhat like a shooting star. However, there is so much in the way of support below that I’m not overly excited about this. I think that this is a market that short-term traders continue to flock to, as we continue to go back and forth. I think if we can break above the top of the candle from last week, the market can probably go higher, perhaps reaching towards $3.25. Alternately, a breakdown below this week’s candle could send this down to the $2.75 level, but at this point it seems as of the market is content to simply go sideways. With that, longer-term traders are probably not that interested. I know that most of the trading scenarios that I see last a couple of hours, perhaps a day or so. With that being the case, I believe that longer-term options might be the best way to play the natural gas markets, perhaps selling calls above the $3.10 level. I believe that the markets are probably ready to go nowhere, and therefore it’s probably best not to be bothered with from the longer-term standpoint. For those looking to play the natural gas sector, I would suspect that we probably have more bearish pressure as the oversupply continues, but when you look at the weekly chart, you can see that we have gone nowhere for three months. With time, I’m not interested in longer-term trades, but might be convinced to sell options on longer-term expiry dates in the futures options market.

NATGAS Video 02.10.17