Technical Analysis Natural Gas for November 17, 2015

Natural gas prices whipsawed on Monday.  After initially moving higher in the wake of the Paris attacks, prices moved lower but closed up on the session.  Prices face headwinds in the wake of Friday’s report from the EIA that showed that injections were 49 billion cubic feet into inventories, bringing the total level of stockpiles in the United States to 3.978 trillion cubic feet. These inventories are 10.3% above last year’s level and 4.5% above the five-year average.

Prices soared to a high of 2.48, before turning lower and closing below resistance at 2.33.  The rejection of higher prices is a sign that natural gas will have a difficult time gaining traction. Momentum remains positive with the MACD (moving average convergence divergence) index printing in the black after recently generating a buy signal.  The RSI (relative strength index) is printing a reading of 41, which is in the middle of the neutral range and reflects consolidation.