Nymex Natural Gas market had a volatile week closing 1.70% higher than the week before at $2.62. Thursday’s EIA storage report showed a 78 Bcf withdrawal for the week ended February 8 which is considered average. Trading volumes remained low during the week, especially on Thursday and Friday when price picked up more than 2%. At this point, many market participants are expecting a bounce to sell it at the first sign of weakness, as price got cheap quickly on this typical late winter bearish sentiment. Despite the shallow working underground stocks compared to the 5-year average, higher production is keeping pace to maintain stability across all pricing hubs in the Lower 48 states.
Patience is comfortable at this time of year, just before Spring contracts start to be traded at higher volumes. Demand will certainly remain high enough for another few weeks. We like to sell rallies for quite a long time as analysts struggle to come to bullish conclusions on fundamentals. The 2016 lows are still shaping the long term sentiment on this market and the range-bound price movements on seasonality are as frequent as gaps are to be filled most of the time. We do not need to trade the longer time frame for futures contracts.
Daily, 4-hour and 15min MACD and RSI indicating entry areas. U.S. LNG exports and a stronger dollar against majors must be permanently monitored.
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