NatGas Futures (symbol: NG) reached the $6.40/MMBtu level on 20Feb14, surpassing our expectation of a test of the $6.11 level. We believe a new bull market is currently emerging in the US natural gas sector, however, further gains may be next winter’s affair. Both stochastic and RSI indicators suggest the recent price action has catapulted NatGas into the over bought range.
Support lies at the $6.11/5.20/4.43/3.13 levels. Lots of resistance between $6.11 and 8.21 range.
Our review of the fundamental and technical information provides cause to reiterate our view of 25Jan14 – “A substantial band of resistance exists in the $6.11-8.21 range. Expect prices this winter to test the lower band of that resistance range, specifically the $6.11 level. Above the $8.21 level, there is very little resistance, but that test is likely one or two winters ahead of us.” (See http://murphycofutures.com/us-natural-gas-update/)
Murphy & Co’s Natural Gas model is currently flat, holding no position. To learn more about Murphy & Co’s position models, visit http://murphycofutures.com/position-models/.