Natural Gas Price Prediction – Prices Rise as Zeta Enters the Gulf
Natural gas prices whipsawed making an outside day, but closing higher on the trading session. The weather is now expected to moderate over the next 6-10 and 8-14 days, following colder than normal weather over the next 5-days. Tropical storm Zeta is now entering the Gulf of Mexico and is expected to be upgraded to a Hurricane. The storm is taking a similar track to Laura and is expected to slam into Louisiana. Hedge funds added to long position and reduced short position in futures and options according to the latest commitment of traders report.
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Technical Analysis
Natural gas prices whipsawed and closed higher making a lower low and a higher high with a higher close. The 10-day moving average recently crossed above the 50-day moving average which means that a medium-term uptrend is now in place. Support is seen near the 10-day moving average at 2.88. Resistance is seen near the October highs at 3.08. Medium-term momentum is positive as the MACD (moving average convergence divergence) histogram prints in the black with an upward sloping trajectory which points to higher prices.
Hedge Funds Add to Long Positions
Hedge funds added to long positions in futures and options according to the latest commitment of traders report released for the date ending October 20. According to the CFTC, managed money increased long position in futures and options by 4.7K contracts while reducing short positions in futures and options by 11.5K contracts. Managed money open interest that is long futures and options outnumbers open interest that is short by 2.2 to 1.