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Natural Gas: Technical Outlook At Year's End

Published 12/26/2013, 07:20 AM
NG
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Natural gas (26.12.2013) respected our analysis and moved to targets as per the last report. However natural gas moved to a higher level after that but many important hurdles kept us away for the time being.

Now natural gas is trading around $4.460 and as we can see on the charts they continue trading above $4.418, indicating that the rally isn't complete and we may witness further bullishness in coming trading sessions. However we also witness a possibility of negative divergence on RSI but it still has space for upside. Consolidation before the contract expiry providies more opportunity for buyers.

On fundamental side the 5-year average inventory for the last week of the year is 3346 bcf while current inventory before last week's withdrawal is 3248. The 5-year average price is $4.142 while the current price is $4.460. Winter weather may continue in US major gas consuming areas.

Natural Gas Daily
Based on the above studies, we will prefer to stay on the bullish side and look for quick upside targets around $4.785 and then maybe $5. However, thin volume may generate volatility before moving up. The 5-year average price of $4.142 will act as our SL on a day closing basis.

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