Natural Gas Breaking Down
Anna Coulling | Mar 27, 2015 06:22AM ET
Whilst fundamentals and weather play a huge role in driving the price action for natural gas, the technical picture is now increasingly taking centre stage as we move into the warmer months of the year and the commodity responds accordingly.
From a technical standpoint the daily chart for the May contract continues to reflect the heavily bearish sentiment for natural gas, and in particular, we are now approaching a key platform of support in the 2.655 region. The congestion phase of the past two months, which has seen the commodity oscillate between 3.050 to the upside and 2.700 to the downside now finally appears to be breaking down, and should natural gas manage to break through the platform of support we could see a further sustained leg down. Yesterday’s trading session saw the volume rise with the market closing lower, and further confirming the current bearish sentiment.
Moving to the weekly chart this bearish sentiment is self evident here too, where we can see two deep areas of price resistance overhead, the first of these at 3.100 and the second at 2.800. Below, the next logical price point for any support is denoted by the blue dotted line at 2.52, a level which last held in November 2013 and helped to propel the commodity dramatically higher into early 2014, when it touched a weekly high of 5.621, coinciding with the polar vortex in the US.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.