Momentum

Following through on leftover momentum from Friday and a renewed burst of strength from the neighboring crude futures market, natural gas futures sprung above $11 on Monday to record a $11.210 high before closing out the day at $11.178, up 40.1 cents from last week’s close.

Attempting to capture Tuesday’s downward momentum, natural gas futures traders on Wednesday pushed the June contract to a low of $10.665 before an afternoon bounce finished the regular session at virtually unchanged from Tuesday’s close. The prompt-month contract closed at $10.843, up one-tenth of a penny from the previous day.

Prices were unable to sustain the upward momentum of Monday’s spikes for the most part and softened at most points Tuesday. Although temperatures were due to continue dropping Wednesday in the Northeast, moderate warming trends will be under way in the Midwest and South. Also, intermediate-term weather forecasts appeared to be less bullish Tuesday than they had been Monday.

With some of Friday’s downward momentum sliding over into the new week, July natural gas futures bounced between a $7.560 low and a $7.705 high before closing out Monday’s regular trading session at $7.608, down 5.5 cents from last week’s close on Friday. While the bears were still having their way, most industry veterans are expecting yet another rebound off support in keeping with the market’s routine of the last several months.

Unable to capitalize on the recent momentum higher and break out of the long-term $7-8 trading range, natural gas futures bulls found no follow-through buying for their cause Tuesday. After trading between $7.680 and $7.855, June natural gas ended up closing at $7.718, down 14.5 cents from Monday’s close.

Firing off of Friday’s 22.9-cent jump, bulls attempted to capitalize on the momentum Monday by pushing June natural gas futures to a high of $7.930. The contract ended up backing off slightly to close at $7.863, up 3.2 cents from Friday’s close.

Maintaining Monday’s downward price momentum, May natural gas futures on Tuesday shed another 11.2 cents to finish the regular session at $7.418. More impressively, the contract’s trading range on the day seemed to point towards the possibility that the week’s 38.3-cent drop through Tuesday might be added to on Wednesday.

Trying to capitalize on the momentum of Tuesday’s significant gains, bulls made a run at $8 in natural gas futures Wednesday only to rebuffed. May natural gas recorded a high of $8.010 before settling the day at $7.855, down 1.4 cents from Tuesday’s trading.

As weather forecasts remained chilly, traders on Tuesday conceded weather-driven natural gas futures price momentum to the bulls as the February contract traded higher for a fourth consecutive session. After carving out a high of $7.600, the prompt month settled at $7.597, up 27.8 cents on the day and $1.363 higher than last Wednesday’s $6.234 close.