Natural Gas Price Forecast – Natural Gas Continues to Rally But on Borrowed Time
Natural gas markets gapped to kick off the trading session to the upside on Tuesday, showing signs of resiliency again. By breaking above the $1.80 level this will have attracted a lot of attention, and of course the 50 day EMA is right there as well. The 50 day EMA tends to be rather important for the natural gas markets, and therefore I think that the rally is about the end. Furthermore, a lot of this will more than likely be based upon the idea of coronavirus numbers coming down, and then perhaps the world going back to work relatively quick. That is something that simply is not going to pan out. Even if the numbers are down permanently, it still a process of getting back to work, not necessarily something that’s going to happen overnight.
NATGAS Video 08.04.20
At this point, the market is still very much in a downtrend, so I don’t wish to fight that, mainly because there is so much in the way of oversupply it’s ridiculous. Beyond that, temperatures are starting to get warmer in the northern hemisphere and of course the coronavirus has demand way down as well. This is essentially a “perfect storm” when it comes to a bearish market, and I think that will continue to be the case going forward. I fade rallies and have no interest whatsoever in buying natural gas anytime soon. As I have stated previously, it’s not until we get a slew of bankruptcies in the space that I would be comfortable starting to buy this market.
This article was originally posted on FX Empire
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