Natural gas prices gapped lower completing the bear flag continuation pattern. The weather is expected to remain near normal or warmer than normal for the next 6-10 and 8-14 days according to the National Oceanic Atmospheric Administration. Supply is rose more than expected, which continues to weigh on prices.
Natural gas prices gapped lower completing the continuation part of the bear flag pattern. This is a pause that refreshes lower. After the initial drop, prices whipsaw and then consolidate before continuing to decline. The gap down on strong volume completes the pattern. An increase in volatility is what is expected after the market breaks down. Resistance near the breakdown level near last week’s lows near 2.27. Support is seen near the August lows at 2.12. Medium-term momentum is negative as the MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices. Short term momentum is negative as the fast stochastic generated a crossover sell signal.
Supply rises with increased imports from Canada according to the EIA. The average total supply of natural gas rose by 1% compared with the previous report week. Dry natural gas production remained constant week over week. The average net imports from Canada increased by 20% from last week.
This article was originally posted on FX Empire
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