Natural Gas Price Prediction – Prices Fall as Momentum Turns Negative

Natural gas prices continue to trend lower on Tuesday, falling for the 4th consecutive trading day. The technicals look negative as negative momentum is accelerating. The decline comes despite warmer than expected weather forecasts throughout most of the United States during the next two weeks. Warm weather should increase cooling demand during a period when the weather is expected to become milder. There are 4-storms in the Atlantic; the two named storms, Peter and Rose, are expected to stay well away from the continental United States. According to the most recent forecast from NOAA, the other storms have a less than 60% chance of becoming tropical cyclones during the next 48-hours.

Technical Analysis

On Tuesday, natural gas prices dropped 3.8%% and is poised to test support seen near the 50-day moving average at 4.25. Resistance is seen near the 10-day moving average at 4.25. Short-term momentum has turned negative as the fast stochastic recently generated a crossover sell signal. Medium-term positive has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line. The MACD histogram is printing in negative territory with a downward sloping trajectory which points to lower prices.