Technical analysis studies the supply and demand of futures contracts. While fundamentals (supply and demand) of natural gas has an impact on price movements in futures markets technical analysis provides the analyst a graphic depiction that can then develop a quantitative analysis for future movements. These “pictures” of price movement track the activity on a monthly, weekly, and daily basis.
Price movements of any commodity are based upon human expectations, not always coinciding with the current perception of physical supply and demand for the commodity. It is EcomEnergy’s perspective that a wise trader (or hedger) should always integrate both the technical interpretation with the fundamental outlook before embarking on a strategy.
We have seen it all before, the futures market reacts violently in the opposite direction that it “should of” - catching participants off guard with no change in basic fundamentals. Why? Technical analysis doesn’t keep this from happening, but rather it brings additional tools to help the analyst asses the market in order to prevent exposure to these violent events. Tracking changes in; volume, open interest, volatility, momentum averages, support, resistance trend charting and the Commitment of Traders Report - EcomEnergy interprets these various tools from a historical perspective providing insight as to current effect on price movement. This provides the reader a more accurate market assessment with which to make decisions.