Kedia Commodity | Feb 12, 2019 10:31
Natural gas on MCX settled up 3.24% at 190.90 settled up holding on to earlier gains after gapping higher on the opening on Monday. The price action is likely being fueled by short-covering and profit-taking in reaction to oversold technical conditions and a change in the short-term weather forecast. According to NatGasWeather for February 8 to February 14, “Cold air over the Midwest will continue to fan out and advance into the southern and eastern U.S. today and Saturday, including with a wintry mix of precipitation along the cold front across the East. Temperatures behind the core of the cold front will drop into the -20s to 20s, but also with teens to 30s into Texas and the South. The West will be unsettled and cool to cold. A mild break will return across the southern and eastern U.S. early next week before another cold shot arrives mid-week with warming then following late week. Overall, national demand will be high Friday-Monday, then moderate for the rest of next week.”
Over the weekend, forecast models converged on a colder pattern developing over much of the country in the 6-11 day or in the February 17-22 period. It's possible that this cold could persist through late February into early March which would increase natural gas prices even further. Technically, some traders feel last week’s sell-off may have been a little overdone given that there are five more weeks left in winter.
Technically market is getting support at 185.7 and below same could see a test of 180.4 level. And resistance is now likely to be seen at 196, a move above could see prices testing 201.
Written By: Kedia Commodity
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