Natural Gas Making Unnatural Moves

Having been stuck in the doldrums for ages, the natural gas market has really woken up recently.

Prices have coiled into a narrow trading range over the past two weeks, with volatile swings of 300-400 points over just a few days becoming the norm. At the moment, it looks like the $3.50 per MMB/tu level is the floor, while the market tries to decide which way it eventually wants to go.

Keep Tabs On The 20-Day Moving Average For Clues To The Next Move

With natural gas prices still sitting near multi-year lows, we continue to have a bullish longer-term perspective.

Also, I’ll reiterate a technical observation from my last issue: Because the 20-day moving average has crossed above the 50-day moving average for the first time since July 2008, this usually leads to a change in direction.

However, as volatile as natural gas is, the 20-day MA is flirting with crossing back underneath the 50-day MA, unless natural gas can muster a convincing move above the $4.000 per MMB/tu level.

We still like natural gas on the long side, but be patient here.