Technical Analysis Natural gas for November 24, 2015

Natural gas prices rebounded after setting new lows on Monday hitting 2.05. Resistance is seen near the 10-day moving average at 2.30. Moderate weather and robust production have pushed the market into oversupply in recent months. Stockpiles of natural gas rose to 4 trillion cubic feet for the first time on record in the week ended Nov. 13, according to the Energy Information Administration.

Momentum remains positive but the trajectory of the MACD (moving average convergence divergence) is poised to generate a sell signal.  This occurs as the spread (the 12-day moving average minus the 26-day moving average) crosses below the 9-day moving average of the spread. The index moved from positive to negative territory which confirmed the sell signal. The relative strength index (RSI) bounced from oversold territory and is printing a reading of 36, which is on the lower end of the neutral range.