Natural Gas: Bears Threaten to Take Charge
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+0.03%
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Movements of natural gas indicate a steep fall could lie ahead, just like what happened in the week that started on Oct. 17. The price has broken the limits set out by the bulls during this week at $6.306 on average amid a volatile week.
Despite an attempt by the bulls to hit $6.552 and stay above $6.4, a weekly inventory build of 64 Bcf pushed them back below $6.2.
Bulls will look to stay away as the bears look aggressive and eager to pile on selling pressure, as was seen on the last two Fridays.
Natural gas futures daily chart.
In the daily chart, the prices show significant weakness, currently down 3.55%.
Thursday’s build in stock was much larger than the 5-year average draw of -5 Bcf as it was much warmer than usual over the eastern part of the US while colder than usual over the West and Northern Plans.
NatGasWeather reports show that colder-than-average temperatures will rule most of the US with rain, snow, and frosty highs of 0s to 40s across the northern US and lows of -10s to 20s.
The southern US will be cool to mild with highs of 40s to 60s, and lows of 20s and 30s, besides warmer 70s in Southwest deserts & Florida. Temperatures will warm over much of the US during the second half of next week.
Technical Outlook
Natural gas futures daily chart.
In the daily chart, natural gas could continue sliding after facing stiff resistance at 9 DMA on Thursday and could find a breakdown below the 26 DMA.
Secondly, the 9 DMA has turned downward and could form a ‘Bearish Crossover’ if the prices close this week below $5.985 or start the upcoming week below this immediate support.
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