Natural Gas Price Prediction – Prices Surge but Fail at Resistance

Natural gas prices surged again on Wednesday but settled off the trading session’s highs after running into resistance. The frigid weather in Texas and throughout the midwest has generated an enormous demand for natural gas. Cash prices continued to surge. Even at Henry Hub, where the NYMEX contract is traded, the Cash values were more than double the price of the future contract.

Technical Analysis

Natural gas prices rose sharply, climbing 3.7% but closing off the lows of the session. Resistance is seen near the October highs near 3.32. Support is seen near the former breakout level near 3.04 and then the 10-day moving average at 2.90. Short-term support has turned positive as the fast stochastic generated a crossover buy signal. Prices are overbought. The current reading on the fast stochastic is 90, above the overbought trigger level of 80. The RSI (relative strength index) broke higher and is accelerating which points to higher prices. The current reading of 71, is above the overbought trigger level. Medium-term momentum is positive as the MACD (moving average convergence divergence) histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.

Cash Prices Surge

Cash prices of natural gas around the south and mid-west have surged to levels that have dislocated from the futures market. Natural gas demand has surged and has made it so many non-essential operations needed to close temporarily to allow natural gas to be used to generate electricity and heat.