Technicals

For the third time in as many trading sessions, natural gas futures sifted lower throughout much of the session after posting a strong opening print. However, while trading sessions on Friday and Monday finished with a late rally, Tuesday’s trading action saw little or no bounce, prompting bears to eye the downside and bulls to turn in their horns. The August contract finished at $2.889, down 5.8 cents for the session and just several ticks off its $2.885 low on the day.

For the third time in as many trading sessions, natural gas futures sifted lower throughout much of the session after posting a strong opening print. However, while trading sessions on Friday and Monday finished with a late rally, Tuesday’s trading action saw little or no bounce, prompting bears to eye the downside and bulls to turn in their horns. The August contract finished at $2.889, down 5.8 cents for the session and just several ticks off its $2.885 low on the day.

Natural gas futures continued its astonishing rally yesterday as fund and local traders used Friday’s strong close as a springboard to a gap-higher open. Bears only hope came in the form of a weak mid-morning sell-off. But when that weakness failed to fill in the chart gap down to $3.08, bulls were quick to bid the market right back up. The April contract closed at $3.305, up 22.9 cents for the session and just below the contract’s four-and-a-half-month high notched Oct. 31 at $3.32.

Despite revised weather forecasts calling for a warm-up east of the Mississippi, natural gas futures shuffled higher Monday as traders continued to hedge for the possibility of a technical short-covering rally. The buying was concentrated in the morning hours and by 12:20 p.m. EST the February contract had already reached its peak for the day. However, only light selling was seen throughout the afternoon and as a result, the February contract managed to hold onto some of its morning advances. It finished at $2.25, up 4.6 for the session, but 7.5 cents off its high trade.

Moderating weather, low storage withdrawals and price-negative technicals were more than natural gas traders could handle last week as they increased their short positions and pressured prices to new lows. The February contract was the hardest hit by the selling, shedding 50 cents last week to carve out a new life-of-contract low at $2.25. Even a slim 0.7-cent gain to $2.275 on Friday, did little to dissuade the bears who look for more weakness this week.

Natural gas futures prices stabilized late Wednesday after sinking to a new two-day low following the AGA announcement that 22 Bcf had been withdrawn from underground storage last week. The January contract settled at $2.719, down 8.4 cents for the session but well above its late-session low of $2.63. Estimated volume was light, as just 67,503 contracts changed hands.

Ending a three-day, 40-cent price advance, natural gas futures sifted lower Tuesday, as trade selling overpowered fund short covering. Negating Monday’s advance with a 12.6-cent decline, the November contract fell throughout the session to close even with Friday’s $2.681 settle.

After failing to test support in the mid $2.90s following a lower open Wednesday morning, natural gas futures contracts worked their way modestly higher in the afternoon as traders elected to look past another robust storage build to focus on hot weather and technical concerns. The September contract led the advance, rising 6.5 cents to close at $3.036. Estimated volume echoed the market’s tentative nature as only 60,979 contracts changed hands.

Amid a steady and seemingly limitless stream of commercial buying, natural gas futures rallied for the second-straight session Monday, as traders priced in the first forecasts for hot weather in the eastern U.S. Breaking through several important technical levels to notch its daily high just moments before the closing bell, the July contract finished 25.7 cents higher at $4.179.