The U.S. Energy Information Administration reported on Thursday in its Weekly Gas Storage Report that natural gas inventories increased by 12 Bcf.
The injection, which is the first of 2015, ignited a sell-off in natural gas futures for April ’15 delivery as prices fell, settling at $2.666 per mmBtu.
Natural gas prices had previously created a nearly two-month channel of support and resistance between $2.68 and $2.92. With the bottom support of the channel now broken, the next major support for the commodity is at $2.579, its February 6 low.
Natural gas is now likely to see resistance at $2.68 in any attempt to push higher.
Thursday’s sell-off also broke an important trendline on the Relative Strength Indicator which had seen 100% accuracy in 2015. As an often overlooked method of using RSI, trendlines can be placed directly on the oscillator itself in much the same way that they are used on price charts.
The MACD Signal Line also made a strong cross of its Indicator Line, a signal of bearish price action ahead.
Volume was light on April ’15 contracts as most natural gas traders and investors have rolled over to May ’15 contracts. The volume on May ’15 contracts was the highest since March 20 of April ’15 contracts.
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