Natural Gas Technical Price Analysis for April 25, 2017

Natural gas prices moved lower on Monday as hedge fund traders continued to liquidate their long position.  The weather throughout most of the United States is expected to be temperate which reduces both heating and cooling demand.  Prices fell another 1.29% following Friday’s decline in the wake of the Baker Hughes rig count which showed new rigs coming on line.  Prices continue to form a head and shoulder reversal pattern with a neckline seen near the 2.75 level. Momentum is negative as the MACD (moving average convergence divergence index) recently generated a crossover sell signal. The index is printing in the red with a downward sloping trajectory which points to lower prices for natural gas.

Hedge Funds Might be Offsides

According to the latest commitment of trader’s report released for the date ending April 18, 2017, managed money increased long positions in futures and options by 14K contracts and reduce short position by 16K contracts. The market is poised for further liquidation.