The January 15 natural gas contract remains in a near free fall dropping to a new 2014 and contract low in Thursday’s session.
The January contract has lost .891 or just under 20% from the 4.529 high set early last week down to yesterday’s 3.638 low.
The next support under Thursday’s 3.638 low comes from the weekly chart between 3.540-3.550 set in October. If the January contract can hold above the October lows as support in upcoming trade, a higher low will have formed on the weekly chart.
Regardless of near term weakness which has taken the market much deeper than expected ahead of winter, a sideways to higher trend should come once the market bottoms.
In 2014, the spot natural gas price fell lower in early-January by nearly 15% before bottoming. Three weeks later the spot price was at 5.725 and seven weeks later the market topped out at a 6.493 high. Caution is warranted about becoming too bearish natural gas ahead of winter.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index - Bearish
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