Natural gas trades higher to a five-month high on forecasts of colder weather throughout the country. The Northeast, the largest nat. gas consumer, and the Southeast seen below average temperatures this week as natural gas futures trade higher for the seventh day. Weather forecasts also see below average temperatures form December 6-12.
The six month daily chart shows the large decline in natural gas from the highs of $4.184 in March. However, natural gas began to gain steam after choppy trade as the winter brings colder weather.
Price action broke through a descending triangle early this month, but natural gas quickly reaffirmed broke support and began to trade higher ever since.
The 20 EMA broke higher though the 50 and 200 EMA. However, Friday’s close was capped by price action resistance created in March and June.
A break above resistance will create an environment for natural gas to trade above $4 once again. However, if price action is rejected, natural gas could trade down to $3.838 prior to retesting resistance.
Be sure to keep an eye on weather forecasts. A change will undoubtedly cause a momentum shift in natural change.