Natural Gas Prices Consolidate After Breaking Out

Key Insights

• Natural Gas prices consolidated, forming a doji day
• LNG Exports rise
• The weather is expected to bifurcate on the Coasts.

On Monday, natural gas prices consolidate their recent gains. The weather is expected to be much colder than normal on the West Coast and much warmer than normal on the East Coast. Due to weather anomalies, heating and cooling demand could see higher use levels. Traders should understand that the temperatures are less important during April, a shoulder season.

LNG exports continue to rise. According to data from Natural Gas Intelligence, estimated natural gas arriving at LNG terminals has climbed above 14 BCF per day on average for the first week of April, which shows the likely acceleration of exports to Europe.

Technical Analysis

On Monday, natural gas prices closed unchanged after breaking out above trend line resistance. Last week. Target resistance is seen near the October highs at 6.28. Support is seen near the 10-dayy moving average at 5.49.

Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Prices have moved back into overbought territory 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 makes 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.