Natural Gas Price Forecast – Natural Gas Continues to Languish

Natural Gas Technical Analysis

The natural gas markets have pulled back slightly during the trading session on Tuesday, but really at this point in time, we have a situation where the market is likely to see a lot of noisy behavior and I do think that the $1.50 level underneath is going to be massive as a bit of a floor looking at longer term charts. Above we have the $2 level which could come into the picture as massive resistance and between here and there we have the 20-day EMA offering resistance as well.

All things being equal, this is a situation where I think you continue to see a lot of choppiness, a lot of people paying close attention to the idea that spring is coming and therefore demand is dropping. But at the same time, you also have a lot of geopolitical concerns about transportation of liquefied natural gas through the Middle East.

Beyond that, you also have to keep in mind that drillers may start to step away from the fields in America if prices don’t pick up. Quite frankly, they’re just not making any money doing this and we are running out of storage, so it’ll be interesting to see how this plays out. If we get a winter storm in the United States, it could cause a short-term spike which is exactly what this market desperately needs. Otherwise, we may just go sideways and continue to build a bit of a base. That basing pattern could last for some time.

Longer term swing traders are probably looking at their chops with the potential of this value being played out, but I also recognize that you’ve got a scenario where you need to avoid the leverage because quite frankly, this could take a while. A lot of patience will be needed if you are looking for a bigger move, so make sure you are not overleveraged in your positions. This market desperately needs to find some kind of reason to go higher.

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