Natural Gas week ahead.

Natural Gas futures on the Nymex bounced as expected during the week. Friday’s session closed 2% higher than a week ago at $2.38. Another three digit build for this already impressive two month injection season at 102 Bcf confirmed by EIA for week ended June 7. Thursday saw the market tumble after this figure but only for a couple of hours. The market will test this new $2.25 -$2.50 range resilience in the coming weeks as fundamentals are not in favor of this market for quite a long time. We like to sell rallies on exhaustion, we cannot buy the longer term, not before a break above the $3.20 knowing that we might not even see this figure before Winter’s seasonality integration. Having said that, we can start testing some short term buying on warmer weather and increase in demand for electricity generation for cooling, only after Daily MACD crosses bullish in the days or weeks to come. Opportunities to sell the same rallies are to be found above the $2.50 as smooth range bound movements on smaller trading volumes are common while summer progresses. U.S. macro figures and the Dollar Index always to be closely monitored. Daily, 4hour, 15min MACD and RSI offering precision to our entry decisions.

 

 

Dimitris Kontoulis.