Natural Gas Price Forecast – Natural Gas Markets Continue to Work Off Negativity

Natural gas markets have rallied just a bit during the course of the trading session on Friday, as we continue to work off some of the massive selling pressure that we have seen recently. Ultimately, this is a market that needs to fill the gap that kicked off the week, meaning that we will probably rise towards the $4.15 level which is sitting right at the 200 day EMA as well. Filling that gap makes quite a bit of sense, as futures markets are prone to do so. At that point, I would anticipate seeing a lot of selling pressure as well as resistance, so with that being said I think signs of exhaustion will be the cue to start shorting again.

NATGAS Video 13.12.21

Keep in mind that the natural gas markets are a purely American market, and with milder temperatures this winter expected, it makes sense that a lot of demand will disappear. This has nothing to do with Nordstream, Vladimir Putin, or European winter. Remember that natural gas is very difficult to send across the world, so this market will disassociate itself from Rotterdam and other places. Based upon the measured move of the triangle that I have marked on the chart; my expected target is $3.00 over the longer term.

I do not have a scenario in which I am a buyer, and I think the absolute “ceiling in the market” is closer to the $4.80 level, meaning that the higher we go, the more likely I am to start looking for selling opportunities. I would not chase the target down here though.

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