Prompt-month Natural Gas prices recorded its lowest close since February today. This comes amid milder weather forecasts as holidays approach.
It could be tough sledding for Natural gas futures in the weeks ahead, as seasonality trends show the month of December to be neutral, and January bearish.
The technicals aren’t much better, with natural gas trading below the 50 and 200 day moving averages. Here’s a summary of the current trading setup:
- 50-day moving average: $2.99 (flat slope), 200-day moving average: $3.02 (flat slope)
- Support lingers in the $2.52-$2.55 area should $2.72-$2.75 break.
- Seasonality: December is rather boring with no trend, and has been positive 50% of the past 20 Decembers with an average “gain” of just 0.1%. January is quite bearish with 65% of the past 20 Januaries being NEGATIVE; the average loss for January since 1998 is -4.5%, the worst of all months.
Natural Gas 5-Year “Monthly” Seasonality Trends (source: StockCharts)
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