Tough Times for Natural Gas

Everything is working Tuesday -- well, almost everything. Natural gas continues to flounder. Even though I am freezing my backside off down here in Texas, temperatures this fall have mostly trended to the warmer side, thus creating the perception that demand for natural gas may be weak. Even if temperatures start to drop and we get a few more of these Arctic blasts, that perception will need to change before the price and pattern will follow suit.

The longer-term technical picture has significantly weakened in the past two weeks. The United States Natural Gas Fund (UNG) is really fighting to hold the 50-week moving average at $19.60. But, without a rebound this week, it will finish below that level -- which had acted as resistance when UNG was trading beneath it. Both the relative-strength index and stochastics have lost their support trends, thus confirming the break in price. Given the technicals here, I don't expect to see a major upswing until both the RSI and stochastics reach oversold territory. UNG should reach at least the $18.50-to-$18.60 level in order for that to occur....183 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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