Natural Gas Price Analysis for May 30, 2017

Natural gas prices moved lower on Monday, as cooler than normal weather spread across most of the east coast of the United States, reducing cooling demand, which reduces natural gas demand.  Prices sliced through and upward sloping trend line near 3.26 which is now seen as short term resistance, and quickly tested the April lows near 3.20.  Additional resistance is seen near the 10-day moving average at 3.30. Prices have formed a double top, as part of a head and shoulder reversal pattern.

Momentum is Negative

Momentum is negative as the MACD (moving average convergence divergence) index recently generated a crossover sell signal. The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices for natural gas. The RSI (relative strength index) broke through support levels, reflecting accelerating negative momentum, which also points to lower prices.