Natural Gas Price Analysis for August 1, 2017

Natural gas prices tumbled 2.5% on Monday as cooler than expected weather is expected to cover most of the Mid-west for the next 8-14 days, which will reduce natural gas demand during the heart of the summer.  With rig counts remaining steady, traders will focus on the weather and inventories, until the Hurricane season picks up.

Momentum Has Turned Negative

Prices sliced through support which is seen as resistance near 2.85.  Target support is seen near the May 2016 lows at 2.77. Momentum has turned negative as the MACD (moving average convergence divergence) index generated a sell signal. This occurs as the spread (the 12-day moving average minus the 26-day moving average) crosses below the 9-day moving average of the spread. The index moved from positive to negative territory confirming the sell signal. The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices.