Natural Gas Weekly Price Forecast – Natural gas markets formed a hammer

The natural gas markets fell during a portion of the week but then turned around to show signs of life again. This market has been hurting a bit as of late, but the fact that we have turned around to show signs of life is a good sign. However, it’s very likely to be a short-term move more than anything else.
Christopher Lewis
Natural gas weekly chart, July 15, 2019

The natural gas markets initially fell during the course of the week but then turned around to show signs of a hammer. At this point, the market is likely to continue to try to drive higher but this is all based upon a tropical storm hitting the Louisiana area more than anything else. This will be short-lived, but it also coincides nicely with the warmer temperatures anticipated for August. That being said, we still have a massive oversupply of natural gas out there so any rally at this point is probably going to be short-lived.

NATGAS Video 15.07.19

At this point, the market looks as if it is trying to build a short-term base but I think that the $2.60 level and of course the 50 week EMA both will offer a significant amount of resistance above. Signs of exhaustion after a rally should be nice selling opportunities, as this is a market that is to be sold and not bought. Perhaps this is more or less short covering, but quite frankly I just don’t see the longer-term risk to reward ratio working out in our favor if we try to buy down here. Alternately, if you are patient enough you should get a nice selling opportunity as this is not the time of year to see bullish natural gas prices typically. Signs of exhaustion will be jumped upon but until then it’s a matter of being patient.

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