Natural Gas Price Forecast October 9, 2017, Technical Analysis

Natural gas markets initially went sideways on Friday but then collapsed, breaking below the $2.88 level which had offered a bit of support on short-term charts. By doing so, we reached down to the $2.85 level, an area that has been supportive on longer-term charts, and bounced from there. As I record this, there is … Continue reading Natural Gas Price Forecast October 9, 2017, Technical Analysis · FX Empire

Christopher Lewis

Updated Fri, Oct 6, 2017, 11:29 PM

Natural gas markets initially went sideways on Friday but then collapsed, breaking below the $2.88 level which had offered a bit of support on short-term charts. By doing so, we reached down to the $2.85 level, an area that has been supportive on longer-term charts, and bounced from there. As I record this, there is a certain amount of bearish pressure still, and if we can break down below the $2.85 level, the market should then go down to the $2.75 level next, which is a massive support barrier itself. I think that this market is going to continue to be very difficult to deal with, at least from the buyer’s standpoint. Every time we rally, I would suspect that there should be sellers out there looking to take advantage of the market, as the bearishness continues and the overall attitude of the markets remain grim.

As we have seen several times, anytime the market breaks above the $3 level, the sellers get involved as US fracking companies become very profitable above the $3 handle. Because of this, there is a massive amount of supply just waiting every time we reach those levels. I don’t think that’s going to change anytime soon, and therefore I think it’s likely that the sellers will continue to run this market. When we rally, I’m willing to stand on the sidelines and wait for signs of exhaustion to take advantage of. I will use short-term charts to do this, and I believe that longer-term charts are very unlikely to give us decent trading signals as the risk to reward ratio isn’t as high as it is on the short-term charts. If we were to break down below the $2.75 level, the markets will probably collapse, sending this market much lower.