Natural gas prices lost ground for a fifth consecutive day on Wednesday as the market is on the verge of falling to new 2014 price lows.
Over the past 5 sessions (last Thursday and Friday combined) the January contract has lost nearly .600 or 13.5% down to yesterday’s 3.805 closing price.
The summer 15 strip (April 15-October 15) has fallen to a new low for 2014 at 3.504 dropping under the previous low of 3.519 set last October.
The remaining portion of the winter 15 strip (January 15-March 15) has yet to fall under its October low of 3.686 but is coming very close.
For the January 15 contract, the current overnight low of 3.746 is holding just above the 3.707 October low and could mark a turning point back higher if October support can hold.
The market has been in a much steeper downtrend than initially expected but might be approaching a buying area near the previous October low. Once a bottom is set, the trend should turn back higher.
And as seen in October, natural gas bottoms at this time of year tend to be V reversals. The reversal in natural gas, whenever it does come, could be an upside spike in the market as volatile as the downtrend has been over the past week.
Technical Indicators: Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bearish
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