At the time of writing natural gas is bouncing 5% off yesterday’s low. This raises the question if the gas price collapse is finally done for good.
Natural Gas Real Time Daily Price Chart
Loyal readers of this blog now understand that the longer term trends always prevail and that a trend reversal may only happen if some conditions are met on the longer time scale.
The volatility charts shown here below highlight that the trend is uniformly bearish from the monthly to the two-year timeframe with the 7-period moving averages pushing on the price and thus propagating the bearishness from the shorter to the longer durations.
Natural Gas Full Future (NYMEX: NGXXXX)
Month (top left) – Quarter (top right)
Two Years (bottom left) – 6 Months (bottom right)
There are very few bullish signs excepted for the rising lower quarterly band (presently at $1.7) and the flat lower 6-month band (at $1.2). The two-year also shows a declining wedge with the lower boundary extending to $1.385 for the current period.
Obviously the price of natural gas can not go to 0 but it should not come as a surprise to see it pushing lower in the months ahead with $1.4 as a minimum target.