Natural Gas Weekly Price Forecast – Natural Gas Markets Give Up Gains

Natural gas markets have rallied rather significantly during the course of the week but gave up the gains near the $3.31 level to turn around and form a massive shooting star and the weekly chart. Looking at this chart, you could suggest that perhaps with the warming temperatures in the central United States, people will start to see more supply come back into the marketplace. With this candlestick, it will attract a lot of sellers, as it is such a common thing to use as a trading signal. Ultimately, if the market were to break down below the bottom of the candlestick, then one can extrapolate that it is a move to the $2.50 level just waiting to happen.

That being said, if we were to turn around a break above the top of the candlestick, then it could really sing natural gas rocketing to the upside, but I just do not see the catalyst at this point, as temperatures are going to warm up heading into spring, and demand should drop. Granted, for the next week or two it might be a little bit noisy due to the market “catching up to demand”, but in the end, I think that any time we rally it will be looked at as a selling opportunity.

Regardless, the simple lack of demand over the next couple of months will continue to be a major issue, and as we are trading the April contract one would have to think that sooner or later this comes into play and ends up being a major factor in this market. I know that the reflation trade is still being thought of, but the oversupply of natural gas continues to overwhelm any demand longer term.