Natural Gas (NYMEX:HPM14)
Last Thursday’s EIA report highlighted stronger than anticipated supplies in natural gas causing prices to tumble into last week’s close. With near-term momentum favoring a bearish argument and price threatening new relative lows below 4.500, the bias in this market is on the verge of a transition to a more neutral to negative posture.
Traders should key in on the 4.500 pivot in today’s session as this 38.2% Fibonacci retracement level also marks the intersection of an ascending trendline with price as well as the 4/17 low. Price traded below here briefly this morning; however, appears now to be mounting a bit of a comeback. If price is able to trade back above 4.500 and sustain a trade above here into the close, then the intermediate term structure of the market could remain valid. On the other side of the equation, if prices remain pressed below the 4.500 technical pivot, traders could look for downside continuation as local momentum could continue to weigh in on prices. If the later scenario plays out, traders could consider 4.383 as relevant support as well as the area from 4.255 – 4.290.
Natural Gas 30-minute Bar Chart (e-Signal)