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Natural Gas Price forecast for the week of October 23, 2017, Technical Analysis

By:
Christopher Lewis
Updated: Oct 21, 2017, 07:22 UTC

The natural gas markets went back and forth during the course of the week, slicing above the $3.00 level at one point, but then pulling back to break down

Natural gas weekly chart, October 23, 2017

The natural gas markets went back and forth during the course of the week, slicing above the $3.00 level at one point, but then pulling back to break down below the $2.85 level. Ultimately, we ended up forming a very noisy looking hammer like candle, and I think that the natural gas markets will continue to be very difficult to trade from a longer-term perspective as we remain range bound overall. That being said, I think that the market will continue to be difficult to trade from a long-term perspective, because quite frankly there isn’t going to be much in the wrist the reward ratio. I think that short-term traders will continue to flock to this market, and therefore longer-term traders at best will probably be looking at trading ETF markets or perhaps even natural gas stocks. I believe it’s not until we break out to a fresh, new high that the natural gas markets can be bought for any real length of time, just as a breakdown below the $2.75 level would be a nice selling opportunity. Until then, short-term traders continue to push this market around, and beyond range bound trading, I don’t see much in the way of an opportunity.

Natural gas has a significant structural problem, because US fracking companies have built up so much in the way of oversupply that every time we get close to the $3 handle, they are willing to flood the market with supply as it’s an opportunity to dump off some of the massive oversupply that they are holding onto, and I think that will continue to be the way going forward, and I don’t foresee a situation where we can break out and above that level for any significant amount of time presently.

NATGAS Video 23.10.17

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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