Natural Gas futures on the Nymex had a volatile week before closing 0.5% lower than the previous one at $3.83. EIA confirmed on Thursday a build of 42 Bcf in working underground stocks after reclassification. Total inventory currently stands at 2,822 Bcf, 16.2% lower y/y, 5.8% below the 5-year average. Both percentages have been looking steady in the last few weeks.
The market has started ranging weeks ago when it reached the $4.00 mark rather quickly on really warm weather across the Lower 48. It looked expensive back then so we have wanted to buy any new exhaustion coming our way. $3.70 looked a reasonable support level. Not too cheap though so we now need to see higher highs. The same ranges will give us more profits on our way to a potential seasonal ceiling of $4.50 for December.
Trading directionally on seasonality is what we want to do. January contract has last momentum, currently trading at $4.00, so it looks like that the market has another 20% to give in uptrend until early winter. We have already taken 30% from this trading idea, so we want to continue buying the dips but only cautiously as the fundamentals for the U.S. Natural Gas market remain flat if not negative. We are going to let the market decide for us while we keep trading the near term charts, so any positive spike will be more than welcome once again.
U.S. macro data and the Dollar Index to be routinely monitored. Daily, 4hour, 15min MACD and RSI are pointing to entry areas.
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