Natural Gas on the Nymex saw a positive week. Friday’s session closed 4% higher than the week before at $2.20.
Thursday’s EIA weekly storage report was the first less bearish of previous months in this extraordinary refill season. 49 Bcf were injected for the week ended August 9. We anticipated this bounce at this point. Daily MACD had already turned green on Tuesday. Buying volumes doubled on Thursday. For the last few years we like to sell this market on shorter time frame charts, on exhaustion, after a bounce or rally. Fundamentals remain bearish. However, since mid Summer we prefer to see these price levels shallow to the $2.50 and only in a temporary cut down range below. The market looking to hold a decent level while summer demand is only half of winter’s. A seasonality spike will eventually occur as Winter contracts will be trading on higher volumes. Short term buying is what we like to test from now on and for the coming months, unless there is an immediate red turn on the Daily MACD in the coming weeks. Volatility and nervousness always expected while most of market participants are gearing up for the Winter trading in most of pricing hubs. Range bound price movements is what this market is all about, while taking into account the long term sentiment or its seasonality feature for its channel. U.S. macro figures and the Dollar Index always to be closely monitored. The resilience of these price lows, to concerns about a potential economic slowdown, will provide another benchmark for the coming months. Trading volumes, Daily, 4hour, 15min MACD and RSI offering precision in our entry decisions.