Natural Gas Weekly Price Forecast – natural gas markets break out

Natural gas markets exploded to the upside during the trading week, breaking almost to the $5.00 level. However, we have given back a huge portion of the gains, and I think at this point we are looking at a market that has peaked for the year.
Christopher Lewis
Natural gas weekly chart, November 19, 2018

Natural gas markets exploded to the upside and towards the $5.00 level. However, we gave back quite a bit of the gains to show signs of overextension. Ultimately, this is a market that has got ahead of itself so I think that you can start to fade this rally. This is a market that has gotten far ahead of itself, as we have seen a precipitous drop in inventory when it comes to natural gas, but quite frankly I think that the market has got ahead of itself. We have given back quite a bit of the gains, as we got too expensive.

NATGAS Video 19.11.18

The big picture suggests that although the supply is a bit low at these points, the reality is that there is more than enough natural gas in the United States to fill the tanks back up. Because of this, I think that we have just seen a “blow off top”, and that we will continue to go lower from here. I would look to fade rallies, although I don’t necessarily think that you should use the weekly chart to make that trade. You may be looking more along the lines of the daily chart for entries. I don’t have any interest in buying this market anymore, at least not until we would consolidate and stabilize, something that’s going to take enough time but I think we would be trading Spring contracts by then, which tend to be a lot less bullish.

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