Natural Gas Price Prediction – Prices Test Ten-Day Moving Average Amid Greater Open Interest

Key Insights

• Natural gas extends gains to start the week.
• The weather is expected to be warmer than usual throughout the South.
• The CME Group preliminary readings indicated that open interest went up for natural gas futures.

Natural gas prices rallied in today’s trading session. According to the National Oceanic Atmospheric Administration, the weather is expected to be warmer than normal during the next 6-10 days and 8-14 days throughout most of the South.

Temperatures have been cooler in the Northwest and the Northern part of the US. Inventories rose in the latest report.

The CME Group’s preliminary natural gas readings stated that open interest for natural gas futures increased by 8,000 contracts. prices face upward momentum despite that prices decline as consumption falls.

This scenario comes as a result of warmer and more moderate temperatures across the United States and less heating demand. 

Technical Analysis

On Monday, natural gas prices hovered near the 10-day moving average of 7.84 before edging slightly lower. Prices might be entering a consolidation phase amid rising interest but falling volume in trading. Target resistance is seen near the $8 level.

Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal.

Medium-term momentum has turned negative. The MACD (moving average convergence divergence) generated a crossover sell signal. This situation occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line).

The MACD histogram is printing in negative territory with a downward sloping trajectory which points to lower prices.