Natural Gas on the Nymex faced another negative week overall, closing at $2.22 on Friday, 5% lower than a week ago. EIA confirmed on Thursday 98 Bcf were injected for week ending October 4. The early seasonality integration rally is not entirely sold and, as August did, market is showing another floor for October. Although fundamentals remain abiding bearish, this is not a time of year to short this market as Winter demand for heating and electricity generation must offer a certain spike even after this extraordinary refill season. Underground working stocks are three weeks ahead of calendar in terms of volume. We like to buy the Winter contracts trading in larger volumes till the end of Fall, while we are looking for first sign of support around the $2.35. 15min, hourly and 4Hour MACD defining our entry points most of the time. We anticipate a crossing into green on the Daily MACD which will build up the market’s conclusive sentiment.
Many U.S. producers are impatient for this development and even more traders across the board are also, as U.S. Natural Gas contracts tend to offer opportunity, amid volatility, for significant hedging. I do not believe we will meet last year’s price level which was cause precisely because of the end of year overreaction and short term use of the market, but we cannot sell at this time of year neither, no matter how gloomy fundamentals the market is facing. 4hour RSI still looking neutral. U.S. macro figures and the Dollar Index to be closely monitored.
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