NatGas futures (symbol: NG) exhibited classic price action with a swift pullback from the $6.493/MMBtu level achieved 24Feb14 to today’s current low print of $4.441/MMBtu. The roll from the Mar14 to the Apr14 contract created a small gap on the continuous charts overnight. (Note: Corrected contract roll months in previous sentence from Feb/Mar to Mar/Apr on 04Mar14.)
The pullback, although violent from a price perspective, has occurred with decreasing volume, suggesting the move is corrective in nature. Momentum indicators will require some time to work off the overbought condition.
Support lies at the $4.44 and 3.05 levels. Lots of resistance between $6.11 and 8.21 range.
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/.