Natural Gas Outlook - Nov. 29, 2010
November 29, 2010 5:35 AM
Below is our Natural Gas Outlook using DiNapoli Levels.
A YouTube video on the above can be found at:
http://www.youtube.com/watch?v=VHyB6rgyDdI
From our last outlook and narrative on natural gas long term price has moved its way bullish having reached a monthly resistance at confluence Kr - 4.318-438.
Per our narrative, if resistance holds, we could see a further push bearish long term. However, from a weekly perspective, note that we did cut through closer resistance Kr - 4.318-351. If we run further bullish over the next few weeks, higher forecasted resistance could be 4.747 near OP / F5 agreement.
Looking down to a 240 min chart, illustrates from the above push where price has found support near confluence Ks - 4.375. The MACD predictor value 4.439 where price would need to break above for a confirmation bullish. The daily chart also illustrates the macd bullish to support.
On a flip side note, further bearishness could be monitored at the long term resistance levels relative to the DiNapoli MACD predictor on the daily. The value here as of this posting is 4.167.
As we saw last week, futures prices were trading well above spot and "a modest fall as expectations for colder weather were slow in materializing and storage levels rose again...The spread between NYMEX and Henry Hub expanded to nearly 30 cents per MMBtu on Friday and has generally remained in a 25-30 cent range, as hedge funds are speculated to be in the market rebalancing portfolios and buying commodities of all types regardless of real-world market fundamentals....An expanding spot/futures differential and growing futures strip creates a new cycle of opportunities for gas producers to hedge their future production at above market prices." (U.S. Energy Information Administration)
The DLEVELS technical outlook provides a framework for traders to formulate their own trading decisions using various instrument strategies. Futures and options contracts on CME can be referenced at the link below:
Going into the New Year, many of our posts will be focusing on energy and indices which will correlate to services on commercial risk management.
Stay tuned for more.
Derek
www.oahucapital.com
