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Natural Gas Prices Break Out Above Trend Line Resistance
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Expectations are for a 67 Bcf draw in stockpiles
Insight
On Wednesday, natural gas prices rallied ahead of Thursday’s inventory report closing above trend line resistance. The weather forecast shows mixed weather across the West Coast and Cooler than normal weather across the East Coast during the next 6-10 days. This situation shows colder than normal weather across most of the East Coast.
According to survey provider Esitmimzed, natural gas inventories are expected to decline by 67 Bcf in the prior week. This figure compares to a 79 Bcf draw in stockpiles in the preceding week.
Technical Analysis
Natural gas prices rose on Wednesday and closed above former resistance, which is now supported near a downward sloping trend line near 5.16. Resistance is seen near the February highs at 5.57.
Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Prices are overbought with the fast stochastic printing a reading of 89, above the overbought trigger level of 80. Medium-term momentum has turned positive. The MACD (moving average convergence divergence) index is making a crossover buy signal. This scenario occurs when the MACD line (the 12-day moving average minus the 26-day moving average, crosses above the 9-day moving average of the MACD line.
About the Author
David Beckerauthor
David Becker focuses his attention on various consulting and portfolio management activities at Fortuity LLC, where he currently provides oversight for a multimillion-dollar portfolio consisting of commodities, debt, equities, real estate, and more.
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