Natural Gas Weekly Price Forecast – Natural Gas Forms Massive Exhaustion Candle

Natural gas markets have rallied rather significantly during the course of the week, only to turn around and show signs of exhaustion. The candlestick is a bit of a shooting star, although the body of the candlestick is a little too big to make that a true shooting star. That being said, the market is likely to continue finding buyers given enough time, but it is obvious at this point that we have run out of steam. Quite frankly, the market has gotten way ahead of itself, as momentum has stalled. The market pulling back does make a certain amount of sense at this point in time, and I think that is what we are about to see. Nonetheless, there should be value hunting underneath.

NATGAS Video 20.09.21

The $5.00 level will attract a lot of headline attention, just as the $4.50 level will be. The $4.00 level for me is the absolute floor in the market. If we were to break down below there, then the market collapses. All things being equal, this is a market that I think will struggle to go higher from here, and even if we did turn around and rally from here, I anticipate that longer-term traders are going to focus on the fact that the headlines have gotten far ahead of the reality. The vertical momentum runs out and therefore the pullback is going to be necessary. That being said, we are at much higher pricing than we typically are this time year, and as a result I think normalcy is coming given enough time, but we clearly have to be cautious at this point in time.

For a look at all of today’s economic events, check out our economic calendar.