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Natural Gas Price Forecast for the Week of January 22, 2018, Technical Analysis

Natural gas markets had a positive week, and impulsive for that matter. The $3 level has offered support on a pullback, but we have seen a bit of resistance above as well.

Natural gas markets were volatile during the week, but ultimately settled on a positive candle stick. Having said that, the market has a lot of noise just above, extending to the $3.40 level. That’s an area that I think continues to be important, and as you can see on the chart attached, I have marked it with a blue rectangle. I think that there is going to be a significant amount of resistance, so I’m waiting to see signs of exhaustion that I can take advantage of.

Ultimately, I believe that the bullish pressure that we have seen as of late will probably dissipate rather quickly, mainly because it is based upon colder temperatures in the United States, and of course the frozen ground that is making it very difficult to extract natural gas out of the ground. However, these are both temporary problems, and we are getting close to a top in the overall seasonality when it comes to pricing. Quite frankly, it’s typical for the market to top out for the year somewhere in the middle of January. If we start to get more drilling and fracking, we will continue to see this market roll over and go down to the $3 handle first, and then eventually the $2.75 level.

If we were to break significantly above the $3.40 level, there is a major gap above there from 14 months ago that should cause resistance as well. In other words, I think you are better off waiting for a sign of exhaustion and start shorting.

NATGAS Video 22.01.18

This article was originally posted on FX Empire

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