Natural gas depreciates due to temporary halt of Freeport LNG facility in Texas

The price of natural gas jumped by 12.49%, rising from $3.332 to $3.735 per million British thermal units on May 22. Yesterday, the fuel reached the level of $3.830, then immediately collapsed by 8.01% to 3.523. Today, on May 29, gas is hovering near $3.55 at the time of writing. A trading channel with strong support/resistance levels has boundaries of $3.1 to $3.8. The local support level stands at $3.435. 

Since May 12, the Moving Average Convergence Divergence (MACD) indicator on the daily timeframe has fluctuated slightly between the positive and negative zones around the zero level. Currently, the indicator readings are just above the zero level and show a weak impulse to buy natural gas, signaling continued consolidation. 

The four-hour MACD is also above the zero line, thus revealing a rapid weakening of the buying momentum in the short term.

The Relative Strength Index (RSI) on the daily timeframe has been descending from the "bullish" zone, away from the overbought line, to a value of 48 since May 12. This indicates the restraint in determining the direction of the price. The four-hour RSI is at 39 and has been steadily declined from the overbought zone to this value since May 22, now signaling the absence of a definite direction. Previously, the indicator was in the bullish zone. 

Natural gas deliveries to the Freeport in Texas decreased on Wednesday. This is one of the most closely watched LNG export plants in the world. Starting and stopping its operations can often cause fluctuations in global gas markets. It has the capacity to consume 2.2 billion cubic feet of gas per day and can produce 16.3 million metric tons of LNG per year. When flows to Freeport decline, gas prices in the US typically fall due to lower demand for fuel from the plant.

Trading strategy option: sell at the current price with Take Profit at 3.435 and Stop Loss at 3.67.