Natural gas futures on the Nymex had a volatile week before closing 2.8% higher than the previous one at $5.07. Another build of 26 bcf was injected in working underground stocks for the week ended Nov. 12, the Energy Information Administration (EIA) reported Thursday. The refill season is being prolonged, and total inventory is currently at 3,644 bcf, 7.8% lower y/y, only 2.2% below the 5-year average.
Since our last analysis two weeks ago, we anticipated ranges moving further lower, touching and testing the $4.80 support level twice already. We now want to see this level of offering resistance. This might take a few weeks before it happens as the daily MACD is looking ready to cross bullish, which will give some momentum to this market.
The same ranges from the latest resistance, somewhere around $5.40 will increase our profits. We have no interest whatsoever in buying operations. We are done for the season, and we are only selling rallies on exhaustion on near-term charts since we identified a ceiling back in September.
The market has offered us more than 50% in real-time trading since the beginning of the latest uptrend and another 30% in the downtrend already. We now want to see the continuation of it, with prices at $4.00 even $3.50 for the shoulder contracts in spring. We will proceed cautiously, staying on the near-term charts as macro is getting tougher to predict because of COVID-19's resurgence in the northern hemisphere.
Rigs keep on coming online. Total inventory is already looking normal after two whole years of consolidation. US macro data and the dollar have to be monitored routinely. Daily, 4-hour, 15-min MACD and RSI are pointing to entry areas.
