Natural Gas Price Prediction – Prices Whipsaw After Testing Lower Levels

Natural gas prices rebounded from session lows, after testing robust support levels. Colder than normal weather is expected to cover most of the mid-west and south-east over the next 6-10 days but the weather is expected to turn milder following that period. There are no tropical cyclones expected to form in the Gulf of Mexico or the Atlantic Ocean over the next 48-hours according to a report from NOAA. Hedge funds added to both long and short-positions evening the balance in open interest in futures and options

Technical Analysis

Natural gas prices rebounded after testing support near the 50-day moving average at 2.70. Initial resistance is seen near the late September highs at 2.93 and then the September highs at 3. Short-term momentum is flat as the fast stochastic continues to whipsaw between positive and negative territory, reflecting consolidation. Medium-term momentum is neutral as the MACD histogram prints near the zero index level with a flat trajectory that reflects consolidation.

Hedge Funds add to Long and Short-Positions

According to the latest commitment of trader’s report released for the date ending September 22, hedge funds added to both long and short positions in futures and options. According to the CFTC, managed money added 17.6K contracts to long positions in futures and options while also adding 39.4K contracts to short-positions in futures and options. Current open interest shows that long positions in futures and options outnumber short position in the managed money space by approximately 100K contracts.