Natural Gas Prices Rally Stalling at Resistance

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Published: Mar 22, 2022, 18:09 UTC

Natural gas prices rally as consumption rose

Natural Gas Prices Rally Stalling at Resistance

Insight

Natural gas prices surged higher, rising more than 5% but were unable to clear resistance. The weather forecast shows warmer than normal weather across the West Coast and Cooler than normal weather across the East Coast during the next 6-10 days. This situation changes to show milder temperatures over the next 8-14 days.

U.S. total natural gas consumption increased this week across all sectors. Total U.S. consumption of natural gas rose by 3.2% on average this report week compared with the previous report week, with all sectors showing increases, according to data from the EIA. The largest week-over-week increase was in the residential and commercial sectors, where consumption increased 6.4%.

Technical Analysis

Natural gas prices surged higher but ran into resistance. Resistance is seen near a downward sloping trend line that comes in near 5.16. Support is seen near the 10-day moving average at 4.77.

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 95, 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.