Natural Gas Price Forecast – Natural Gas Markets Struggle With 50 EMA

Natural gas markets have initially tried to rally during the trading session on Friday, but then gave back a bit of momentum once we reach the 50 day EMA. Looking at the candlestick, it looks a bit like a shooting star, which means we could drift lower from here. Having said that, I also recognize that there is a lot of support underneath that will continue to attract a lot of attention.

NATGAS Video 08.06.20

The $1.60 level begins a massive amount of support down to the $1.50 level. Ultimately, I think that is an area that will be protected by longer-term traders, especially as the $1.50 level has been so crucial from a longer-term standpoint. On the other hand, if we were to break above the 50 day EMA, something that we have not been able to do for the last three sessions, then it gives you the ability to see the market reached towards the $2.00 level. All things being equal, you should take a look at this chart and recognize that there is a huge “rounded bottom”, which of course is a longer-term bullish signal.

All things being equal, I believe that this market is going to continue to be choppy but I prefer to buy dips as it seems like there are a lot of value hunters out there, perhaps based upon the idea of the economy reopening, and of course the fact that so many US drillers will be going out of business soon, due to the very weak pricing power and of course the massive oversupply.

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