RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

The trend in natural gas is down.  Prices have been retreating for the past week.  With unseasonably warm weather patterns expected throughout the end of February, natural gas may struggle to hold the 2.900 mark.   Temperatures at or near the 60 degree mark should extend over two thirds of the country, with no end in sight.  Clear skies and sunshine are reported going into the next week.    

The close beneath the 9, 18; and 27-day moving averages confirm the downtrend. RSI, MACD, and Stochastics are all approaching oversold levels, but until we see a divergence in the price action it simply indicates the market is trading strongly in this direction.   COT information shows the funds are still long over 100,000 contracts.  This can be troublesome, as stops are hit or they decide to liquidate their positions. 

Resistance is right around the 3.000 level.  Then about 3.200 and above.  A close above 3.000 might spark the bull market.  Until then, any bounces should be viewed as opportunities to sell.  A close south of 2.900 is bearish and could signal a greater leg down.  I would suggest exposure to short side.  Either short the contract or owning puts. 

 

Natural Gas 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.