Natural Gas Futures Sit in Consolidated Downtrend

April 12, 2018 11:19AM CDT

The trend in May natural gas is down.  It has been trading in a consolidation over the last week to week and a half.  The market is supported between 2.650 down to 2.600.  Above 2.700 may turn the tide back to the bulls.  Above the April 4 high of 2.746 should signal a charge toward the 2.800 mark, and finally above the March 13 high of 2.831 might see a run to a target in the 2.900’s.  All momentum studies are at mid-levels and moving sideways.  We are still waiting for a divergence to signal a directional move.  

Weather has been starting to warm up.  This year has started out below normal temperatures up until now.  This week the forecast is calling for more seasonal temps.  Some 60’s and 70’s temperatures will be seen in the Midwest.  The last snows might have fallen for this year and spring will finally arrive, after one more cold spell early next week.  A slightly larger draw of -19 bcf was realized this week after the estimates called for -11 bcf.  The 5-year average is a slight surplus of 9 bcf.  I suggest further exposure to the short side until we see something material to change the current trend.

Natural Gas May '18 Daily Chart

Natural Gas May '18 Daily Chart

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

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.