Technical Natural Gas report for September 1, 2016

Natural gas prices moved higher on Wednesday despite a drop in petroleum prices as warmer than normal weather is forecast to return and cover most of the United States over the next 8-14 days.  Warmer weather generates cooling demand which is created from natural gas driven turbines.

Prices are poised to test resistance near the August highs at 2.95, while support is seen near the 20-day moving average at 2.75. Momentum on natural gas remains positive as the MACD (moving average convergence divergence) index prints in the black with an upward sloping trajectory after recently generating a buy signal.  The potential for hurricanes are growing and with a tropical depression circling in the gulf, traders should be leery of a spike in prices.