The Downside of December Natural Gas

October 27, 2016 2:01PM CDT

December Natural Gas is currently in a down trend. It is trading at 306.8 as of this writing. A closing price under our support number of 298.0 is bearish, and may trigger selloffs back near the 280.0 level. In the event of a close above 320.00, then a move to 340.00 is entirely possible. Momentum indicators (RSI, MACD, and Stoch) all point to a lower move if the support is broken. Some caution is warranted, because prices are approaching over-sold conditions. A divergence between price and the indicators will signal a change in directional bias from traders. 

Slightly above average temperatures across the continental United States are tempering the demand for heating usage, and a slightly higher than expected build in this week’s storage also will keep pressure on the near-term pricing. Cautious exposure to the down side is still recommended. Call me for details and trade ideas at 888-874-8110. 

Natural Gas Daily  

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