Natural Gas week ahead.

Nymex Natural Gas futures initially continued to climb then pulled back closing 3% lower than a week ago at $2.53. Thursday’s EIA weekly storage report confirmed another large build for this time of year of 84 Bcf in working underground stocks for week ending September 13. This last 45 day rally had to stop at some point and a range is likely to appear moving forward trading the Winter demand on larger volumes. As most of producers want, we like to think that the $2.50 long term Fibonacci support has to be considered as the lower bound with the $2.00 as an extreme floor for the coming Winter. Although fundamentals keep looking everlasting bearish for this market and the fossil industry overall, Winter demand will be enough for U.S. Natural Gas price to see range bound movements in an uptrend for the coming months, while seasonality is being integrated on price. $3.50 has to be considered attainable. We like to trade the Daily and 4hour MACD so buying the short term is what we do since mid August and what will probably be doing till the end of Fall. January contract currently at $2.807. A supportive candle is what we expect to see before start buying again. 4hour RSI already looking oversold. The first sessions of the week will tell if there is going to be a reverse in the Daily MACD, in that case we expect the market to pull back even more but only temporary, hitting $2.35 before returning into green. U.S. macro figures and the Dollar Index have to be closely monitored. Daily, 4hour, 15min MACD and RSI pointing entry areas.

 

 

Dimitris Kontoulis.