NATGAS Video 08.06.20
Natural gas markets have gone back and forth during the course of the week, ultimately settling on a candlestick that could be interpreted as a hammer. I believe at this point it is only a matter of time before this market continues to try to grind higher, perhaps due to the fact that it is more or less a “rounded bottom” formation just waiting to happen.
Even so, I also look at the $1.60 level extending down to the $1.50 level as a massive “floor” in the market. The candlestick shows just how confused we are, but even as we have been drafting lower of the last three weeks, take a look at the fact that the candlesticks are relatively neutral. That tells you that there is not any type of panic in the market to the downside and therefore I think we are going to continue to see this slow grind to the upside.
There are a lot of drillers out there that will be going out of business in the United States, driving down supply. If that is going to be the case, then it should help get rid of some of the supply and we could break towards the $2.15 level. A breakout from here should see plenty of support given enough time at the $1.50 level, and I think that is essentially your “floor” in the market. With all of this in mind, I believe that longer-term investors are starting to look to the upside more than anything else.
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Read More: Natural Gas Weekly Price Forecast