Natural Gas Price Analysis for August 15, 2017

Natural gas prices whipsawed higher and quickly reversed on Monday, forming an outside day which is a reversal pattern that usually comes at the end of an uptrend. Prices has been buoyed coming into the Monday trading session following last week’s smaller than expected build in natural gas inventories.  Warmer than normal weather continues to be forecast to cover most of the United States over the next 8-14 days, but this is the tail end of the cooling season, which might be too little too late.

Momentum Remains Positive

Support on natural gas prices is seen near the 10-day moving average at 2.86.  Resistance is seen near the 3.11 level.  Momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the spread (the 12-day moving average minus the 26-day moving average) crosses above the 9-day moving average of the spread. The index moved from negative to positive territory confirming the buy signal.