Natural gas prices surged more than 11% on Monday, following a report that showed that hedge funds added more than 28K contracts in the prior week. This appears to be a short-term squeeze in prices, as it’s unclear if demand will rebound with some many businesses have yet to reopen due to the spread of COVID.
Natural gas prices surged higher on Monday rising more than 11% and slicing through resistance which is now short-term support near the 10-day moving average at 1.68. Resistance is seen near a downward sloping trend line that comes in near 1.77. Short term momentum has turned positive as the fast stochastic generated a crossover buy signal in overbought territory. Medium-term momentum is neutral but attempting to turn positive. The MACD histogram is printing in the red with a rising trajectory which points to consolidation.
Hedge Funds Add to Long Positions
Hedge funds added to long positions by increasing their open interest in futures contracts by 28K last week while increasing short positions by less than 1K. The total open interest in long positions is now 251K contracts compared to open interest in the managed money space that is short which is 281K contracts.
This article was originally posted on FX Empire
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