The finicky behavior of Natgas continues as we head into the winter. First it was the “winter warmer than normal” forecast from November that drove the price down from 3.20 to 2.60. Then came that dramatic turnaround just before Christmas when snow storms were to hit the East & mid-west US and colder weather was forecast for many parts of the US. Since then, prices have continued their upward journey and as of Jan 12, Natty has traced back all of it December losses.
Now that the prices are once again back at the November peak, what do short term technicals say? Let us take a peek with the momentum oscillators on the 4 HR chart. This post focuses on the next short term move hence I have chosen to discuss the 4 HR chart.
Chart 1: Price chart (4 HOUR) with Keltner Channel and Moving Averages
Chart 2: Stochastic RSI (4 HOUR)
Chart 3: CCI (4 HOUR)
Chart 4: MACD (4 HOUR)
SUMMARY
While the weather forecasts may continue to rule the roost in the short run, technicals especially the short term momentum oscillators indicate we are nearing an overbought condition. I expect NG to reverse soon, possibly after hitting the Nov peak of 3.23. My short term target is 2.97 – 3.02 (and my confidence level in bearishness is 75 %)
