Natural Gas Technical Report for February 23, 2017

Natural gas prices consolidated on Wednesday, as traders await the EIA inventory report which is scheduled to be released on Thursday.  Prices made a lower low, dropping to 2.52, following Tuesday’s route which saw prices drop more than 9.5%.  Warmer than normal weather is forecast to cover most of the United States over the next 8-14 days, according to a report from the National Oceanic Atmospheric Administration. Warmer than normal weather during the heart of the winter reduces heating demand which in turn reduces the price of natural gas.  Support is seen near the February 2016 lows at 2.47.  Resistance on natural gas is seen near the November lows at 2.78.

Natural gas Prices are Oversold

Momentum remains negative as the MACD (moving average convergence divergence) index prints in the red with a downward sloping trajectory which points to lower prices. The RSI (relative strength index) which is a momentum oscillator is printing a reading of 26, below the oversold trigger level of 30 which could foreshadow a correction.