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Natural Gas Weekly Price Forecast – natural gas gives back gains for the week

By:
Christopher Lewis
Updated: Jan 18, 2019, 18:34 UTC

The natural gas markets initially tried to rally during the week, gapping higher on Monday. We even shot towards the $3.40 level before rolling over. In the end, we did of forming a very bearish looking candle.

Natural gas weekly chart, January 21, 2019

Natural gas markets initially gapped higher on Monday and then reached close to the $3.40 level. We found enough resistance there to turn things around and form a shooting star, which is a very negative sign. We gave back all of this gains over the next couple of days, and in the end had a very negative weekly candle. Ultimately, there is a gap below that I think needs to get filled and I believe that’s exactly what we are getting ready to see. I think that the oversupply of natural gas is a longer-term structural problem, so in general I don’t like buying it. We have had the seasonal spike, and it is now dead. I believe we will continue to see the market be what it normally is: selling rallies.

NATGAS Video 21.01.19

The $2.75 level is support, as it was previously. We have made a complete round-trip over the last couple of months, which is typical for this time a year. I think at this point looking for signs of exhaustion to sell will continue to be the way forward, and longer-term traders will simply look to sell every $0.50 or so, Perhaps even every $0.25. I have no interest in buying this market, because quite frankly it cannot sustain rallies, as seen a couple of weeks back. Ultimately, this is much like gold was in the 1980s: you simply sell every time it rallies as it can’t sustain buying pressure for any significant amount of time.

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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