I think gas will go to $5.00 this fall--Anybody agree? Disagree?
N.Y. Natural Gas Futures Moving Toward $5: Technical Analysis
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By Reg Curren
June 29 (Bloomberg) -- Natural gas futures are heading toward $5 per million British thermal units as price support builds for the power-plant and industrial fuel, according to a technical analysis by Chris Jarvis, president of Caprock Risk Management LLC.
The futures contract has rallied and retreated three times since dropping to $3.155 per million Btu on April 27, the lowest in more than six years. Gas now has established a support line that may push prices into a range of $5 to $5.20, Jarvis said in a telephone interview.
“Natural gas could be coiling for a move higher,” said Jarvis, who is based in Hampton Falls, New Hampshire, and is a chartered market technician. “The $3.60-to-$3.80 area has been a big area of support and we’re holding that again. The longer we stay down here, to me, the bigger the upside move.”
Jarvis said gas will have to break through an area of resistance at $4.38 and then $4.575, the latter of which was a three-month high reached on May 13, before reaching his target price this summer.
Natural gas for July delivery rose 10.5 cents, or 2.7 percent, to $3.949 per million Btu on June 26, its last day of trading on the New York Mercantile Exchange. Prices are down 71 percent since reaching a 2008 high of $13.694 per million Btu on July 2.
Moving averages, an indicator watched by some technical traders, also appear set to turn higher, another bullish signal for natural gas, Jarvis said. Gas last week closed above the 50- day average, which has reached about $3.84 per million Btu.
“The 50-day moving average is starting to turn up and the 100-day is starting to make that same move,” he said.
Technical traders monitor patterns on daily charts for clues to price direction, and may sell or buy based on those signals. The moving average shows the average value of a security or commodity over time.
Share | Email | Print | A A A
By Reg Curren
June 29 (Bloomberg) -- Natural gas futures are heading toward $5 per million British thermal units as price support builds for the power-plant and industrial fuel, according to a technical analysis by Chris Jarvis, president of Caprock Risk Management LLC.
The futures contract has rallied and retreated three times since dropping to $3.155 per million Btu on April 27, the lowest in more than six years. Gas now has established a support line that may push prices into a range of $5 to $5.20, Jarvis said in a telephone interview.
“Natural gas could be coiling for a move higher,” said Jarvis, who is based in Hampton Falls, New Hampshire, and is a chartered market technician. “The $3.60-to-$3.80 area has been a big area of support and we’re holding that again. The longer we stay down here, to me, the bigger the upside move.”
Jarvis said gas will have to break through an area of resistance at $4.38 and then $4.575, the latter of which was a three-month high reached on May 13, before reaching his target price this summer.
Natural gas for July delivery rose 10.5 cents, or 2.7 percent, to $3.949 per million Btu on June 26, its last day of trading on the New York Mercantile Exchange. Prices are down 71 percent since reaching a 2008 high of $13.694 per million Btu on July 2.
Moving averages, an indicator watched by some technical traders, also appear set to turn higher, another bullish signal for natural gas, Jarvis said. Gas last week closed above the 50- day average, which has reached about $3.84 per million Btu.
“The 50-day moving average is starting to turn up and the 100-day is starting to make that same move,” he said.
Technical traders monitor patterns on daily charts for clues to price direction, and may sell or buy based on those signals. The moving average shows the average value of a security or commodity over time.
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Replies to This Discussion
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Permalink Reply by ALongview on -
I never said anything about who is at fault just the two scenerios that I see going forward. I didn't forget anything, I am just hoping for the best going forward as there is no changing what has already happened. Not every post has to have a political slant and mine certainly was not meant to. I don't want to get in the middle of that.
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Permalink Reply by ALongview on
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Jay, My response was to Jim. Sorry, but I am out on the politics thing as well.
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Permalink Reply by The_Baron on
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Its ok Jay, Every once in while we all get riled up and have to speak our mind.
Just all further proof we should vote out all those bozos and start over with a new crop of idiot leaders.
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Permalink Reply by Dorcheated A1 on
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Thanks Jay,
I didn't mean to pull you into that, your too nice of guy. It's a honor to be Jim's whipping boy. I was just passing by and saw that, so I figured I let him know I was here.
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Permalink Reply by MB on
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ALongview, not really speaking to "inflationary" so much as to "global boom", an option few are considering. What almost no one is talking about is how "the bond vigilantes" will respond to a hyper-inflationary scenario. I think if they're on the ball, we don't get it and just anemically limp along. We Americans are accustomed to thinking U.S.-centric about nearly everything globally, but for the first time in our lifetimes--and perhaps since America was itself an emerging nation/economy--it might work better to pay attention to dynamics in other regions of the globe. With credit spreads much narrower, stimulus beginning to make an impact (and will for a while), and oil already back at $70+, what does that say about the global economy a year from now? Several implications, one of which is Boone Pickens' frightening scenario: Good for Shalers but really challenging for U.S. consumers. And it might just be the case that the rest of the globe can prosper w/o us. I know it sounds crazy, but in our Little Village of Anatevka... Best.
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Permalink Reply by The_Baron on
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I love to see a global boom. Just don't think its going to work out like that though.
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Permalink Reply by MB on
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The Baron,
1) With China's projected (depressed) growth at 8% and India's at 6% prospectively...and the entire region's forward hurtle ex-Japan (who might surprise); 2) with all major and quite a few emerging economies pumping cash furiously; and 3) assuming no trade wars...why not?
Here's one chart: http://research.stlouisfed.org/fred2/series/MZM?cid=30
Here's another: http://www.investmenttools.com/futures/bdi_baltic_dry_index.htm
TWT. Best
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