Natural Gas Price Analysis for May 15, 2017

Natural gas prices continue to break higher as news that the U.S. and China have agreed to a basis for a trade agreement. This would allow the U.S. to ship natural gas directly to China increasing demand for U.S. products.  The surge comes despite an up-tick in gas rigs that are active according to Friday’s Baker Hughes report.

Natural Gas Breaks Out

Prices tests former resistance now support from a downward sloping trend line that is constructed from the highs in December to the highs in April that comes in near 3.35.  Prices also surpassed the April highs and are now poised to test the January highs at 3.54.  Momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the spread (the 12-day moving average minus the 26-day moving average) crosses above the 9-day moving average of the spread.