Natural Gas Price Analysis for August 7, 2017

Natural gas prices rebounded after hitting support near 2.75, but remained in the red ahead of the close on Friday.  On Thursday, the Department of Energy reported a smaller than expected build in natural gas inventories, but most of the focus remains on the weather. Forecasts from the National Oceanic Atmospheric Administration predicts that the weather will remain much cooler than normal throughout most of the mid-section of the United States and is moving east, pushing cooler weather into the east coast.

Bear Flag Pattern Continues

Prices continue to form a bear flag pattern and Friday’s drop, is consistent with this pause that refreshes lower. Resistance on natural gas is seen near the 10-day moving average at 2.86. Momentum remains negative as the MACD (moving average convergence divergence) index recently generated a sell signal. The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices.