Natural Gas Futures trades below major simple moving averages – Charles Schwab

Natural Gas prices have been on the decline since the beginning of May. Since that time the September contact has traded to a low of $1.583 on June 26. A rally above the 50-day SMA failed to hold the high of $1.989 and now prices are headed lower once more. Meanwhile, storage capacity increases and warmer than average weather is expected, per Charles Schwab.

Key quotes

“Traders will need to consider whether the higher than expected temperatures will be enough to offset any additional demand destruction posed by future lockdowns due to flare ups in the COVID-19 virus.”

“Looking at the daily chart for September 2020 Natural Gas Futures (NGU20), we notice the price is below the major simple moving averages of the 200, 50, and 20 SMA’s.”

“The RSI, a momentum indicator, has a reading of 38 indicating selling pressure has been strong over the last 14 days.”

“Look for support near the lows of July 26 at approximately $1.583.  Short-term resistance may be encountered at $1.765, representing the low end of a brief consolidation area that occurred between July 12 and July 16.  Intermediate resistance may be encountered at approximately $1.90.”