Natural Gas Tipping Sideways, Where Will it Land? | RJO Futures

May 25, 2017 10:46AM CDT

Today the trend in July natural gas is sideways to down. Any bullish action should be contained by yesterday’s highs. Resistance is at 3.350 and above that at 3.401. Support can be found around the 3.250-3.260 level on the daily chart below.

Weather has not had a significant effect on supporting pricing. A cool stretch has cut down cooling demand, and if the forecast holds true, it will be delayed until much later in the summer.

A 72 bcf build is expected this week. A reading below that mark would be considered bullish territory. Caution should be used when making a bullish trading decision, because to nullify the bearish trend there must be a close over the corrective high of 3.371.

The 2-day slide should continue due to a change in momentum, and may continue with prices trending down to levels below 3.200. Momentum indicators (RSI, Stochastics, and MACD) are at mid-levels and trending lower, which should accelerate a move down if support is broken. Today’s trade idea is to gain exposure to the short side of the market. Either short a contract near 3.330 with a stop above 3.350, or look at a bear put spread for July.


Jul '17 Natural Gas Daily Chart

Jul '17 Natural Gas Daily Chart

RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that RJO Futures believes to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgement at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.

Distribution in some jurisdictions may be prohibited or restricted by law. Persons in possession of this communication indirectly should inform themselves about and observe any such prohibition or restrictions. To the extent that you have received this communication indirectly and solicitations are prohibited in your jurisdiction with registration, the market commentary in this communication should not be considered a solicitation.