Despite a rally to launch the trading week, prompt month natural gas futures could soon face technical resistance.
The October Nymex gas futures contract on Monday settled at $2.373/MMBtu, up 6.8 cents from Friday. This followed back-to-back weekly gains. However, the spate of active buying could soon run its course and trigger a bearish adjustment, said NGI’s Patrick Rau, senior vice president of Research & Analysis.
“October looks ripe for a correction to the downside, given that it is trading at the top of its 20-day Bollinger Band and slow stochastics are clearly in overbought territory,” Rau said Monday. “More importantly, the contract remains bound by the horizontal trading pattern that has contained it within the $2.00-$2.42 range since mid-July.”
