Natural Gas Weekly Price Forecast – Natural Gas Continues Choppiness

Natural gas markets have had a bullish week, breaking above the 200 week EMA but gave back the gains almost as soon as we get above there. The candlestick suggests that there is still a significant amount of resistance above, and quite frankly that makes sense considering the time of year. With that being the case, I do look at this as a potential short selling opportunity as winter is starting to run out of time, and although there is a certain amount of cold weather in the short term, that will be enough to break down the overall oversupply of natural gas around the world and most importantly in the United States.

NATGAS Video 01.02.21

To the downside I see the $2.30 level as a potential target, followed by the $2.00 level, but I think it will be some time before we get to that level. We are trading the March contract already, and it is probably only a matter of time before we see traders start to focus on the warmer temperatures coming down the road. Because of this, and the fact that this is a well-known cyclical trade, I am only looking for short opportunities, and if you squint real closely, you can see that we could be forming a bit of a head and shoulders as well. Because of this, I think it is only a matter of time before we break down and I look at any rally as an opportunity to get short from an even better position. The area above $2.80 has proven itself to be like a brick wall.

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