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Energies

Natural Gas Trend Down Heading into Colder Temperatures

Posted 11/30/2017 8:31AM CT | Jeff Ratajczak

Happy holidays and welcome back from the Thanksgiving break.  My charting indicates short and longer term trends are still pointed down.  The 11/24 sell off provides a near-term target for shorts and a hail stop for all longs.  Today’s storage number is estimated to be averaged at -37 bcf draw.  A larger draw may signal an upside move.  Close in support on a daily chart is near the 3.100 level or today’s low.  Resistance and the corrective high are both at 3.218.  A close above 3.200 may signal a move to the next higher trading range.  Momentum studies are at mid-levels and trending lower.  This can accelerate moves to the downside if support is violated.

Trading might be dependent on the storage number for today. We are below last year’s and the 5-year averages for gas storage.

 The size of the draw might determine direction today, but in the long run weather may make our decision for us.  The 1 to 5-day forecast calls for normal to above normal temps, however longer term models are calling for colder air from the arctic to invade the US and drop temperatures below seasonal averages.  Chicago will struggle to have highs above freezing early next week.  Colder weather is forecasted after that for the foreseeable future as winter will return and demand for heating.  Long outlook: Bullish long exposure warranted on pull backs, or lager draw.  Call for recommendations and details.

Natural Gas Jan '17 Daily Chart

Jeff Ratajczak

Jeff attended Illinois State University. In 1993 Jeff began his financial career in the stock market as a retail broker. He transitioned to futures in 1999 with LFG Intermarket Group, which became ZAP Futures. In 2004 ZAP Futures was acquired by RJO Futures' parent company R.J. O'Brien. Jeff's focus is to assist clients in managing risk and speculate through futures and options strategies.