Natural Gas In Need Of Buying Volumes

Natural Gas futures on the Nymex had a negative week before closing 7.3% lower than the previous one at $2.77. EIA confirmed on Thursday another bullish nonetheless withdrawal of 338 Bcf in working underground stocks for the week ended February 19. Inventory is currently at 1,943 Bcf, 13.3% lower y/y, 7.7% below the 5-year average.

This is the first time during the withdrawal season that both percentages are looking this bullish. Recent blizzards had to offer some support, yet supply technicalities erased it. Price fell significantly from old resistance. The downtrend is set to continue just as we had anticipated. Fundamentals and the market's seasonality feature are looking well-built for another season.

We have been selling rallies on near term charts since past November when we identified a seasonal ceiling. We had considered this latest $3.00 move as a gift really for our directional trading ideas. Daily MACD crossed bearish but we still need to see new resistance at $2.60 to make us feel better about lower lows below the $2.25 level. Support at $2.40 must be respected for now. We are not interested in buying operations, not before the summer contacts start trading in larger volumes. Spikes will only add to our profits, range-bound behavior is what we want to see next in lower ranges.

More stimulus is coming and it will have commodities well supported. U.S. consumer spending is looking better lately. OPEC+ is doing a precious job while still keeping production cuts in place. U.S. shale oil producers are looking very well supported lately even by accident. Natural Gas demand has peaked while more rigs keep coming online. 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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