Natural Gas Futures on the Nymex had another positive week before closing 4% higher than the previous one at $1.81 on Friday.
EIA confirmed on Thursday a build of 56 Bcf in working underground stocks which is bullish for this time of year. Weather remains hot across most parts of the Lower 48 and demand rises because of increased power generation for cooling. The total inventory is 28% higher y/y and 16.9% above the 5-year average.
Supply remains steady although online natural gas rigs are down 56% than a year ago. The market rallied from a double bottom and it is now becoming more technical just above a higher support level of $1.70 on its way to meet new higher lows. To do so it needs to break above the $2.00, close to a 200-day EMA and sustain $2.00 - $2.10 on the positive sentiment in fall.
Since we have identified a floor at $1.50, we want to consider the current price shallow to $2.00 and $2.50 must be considered attainable for winter contracts. January currently trading at $2.85, looking weak lately. We are buying the dips and following rallies until exhaustion, taking profits multiple times from the same range. Exhaustion is natural while the economy is recovering and the coronavirus concerns are alive in 44 states.
Range-bound price movements are expected before a clear uptrend. We prefer trading near term charts. The oil and gas industry faces a long-lasting consolidation in time of decarbonization. The Dollar Index and U.S. macro data to be closely monitored, especially the consumer confidence and housing figures, at a time when the whole trading board has become green too quickly amid the crisis. Daily, 4hour, 15min MACD and RSI pointing entry areas. 