Cooler US weather forecast is bearish for natural gas prices
Natural gas prices decline on cooler US weather forecast. Will natural gas prices continue falling?
On the daily timeframe the NATGAS: D1 has been retracing lower following the rally after hitting six-month high in mid-May. The price has fallen below the 50-day moving average MA(50) which is falling.
- The Parabolic indicator has formed a sell signal.
- The Donchian channel indicates a downtrend: it is tilted downward.
- The MACD indicator gives a bearish signal.
- The stochastic oscillator is falling but has not reached the oversold zone.
We believe the bullish movement will continue after the price breaches above the fractal high at 1.2816. It can be used as an entry point for a pending order to buy. The stop loss can be placed below the lower Donchian bound at 1.2635, confirmed also by the fractal low. After placing the pending order the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop-loss level (1.2635) without reaching the order (1.2816) we recommend cancelling the position: the market sustains internal changes which were not taken into account.
Summary of technical analysis:
| Position | Sell |
| Sell stop | Below 2.889 |
| Stop loss | Above 3.084 |