Natural Gas Week Ahead - Monday, August 26

Natural Gas on the Nymex lost some momentum during the week closing 2% lower than the previous one at $2.15. Thursday’s EIA weekly storage report confirmed another 59 Bcf build for the week ending August 16. The refill season is being extended although recent short term price spikes show that many market participants are readjusting for trading the Winter contracts on higher volumes. Price held a decent level during the dog days and opportunity is to be found on its seasonality and cyclical spike that is about to develop in the coming months as Summer demand for Natural Gas is only half of Winter’s. Range bound movements, however, are very likely till the end of September as the injection season is not over yet. We now like to buy the short time frame charts while Daily MACD remains in green territory. Sentiment remains bearish on fundamentals so the opportunity to sell those brief rallies, on exhaustion, is to be found a little bit higher than current levels. We prefer to look at present price levels as shallow to the $2.50 major long term support. Longer-term traders, however, will have to wait another month for a potential break out. U.S. macro figures are very important at this point. We constantly keep an eye on the Dollar Index. Trading volumes, Daily, 4hour, 15min MACD and RSI defining our entry points.

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