NYMEX April Natural Gas futures (NGAJ0):
NGAJ0 is continuing its short-term decline to the lower channel line. As both the short-term and the medium-term directions are down, the result is a rapid price collapse over the past few days.
The forward curve illustrates weakness, as the contango increased both at the front of the curve and between the winter peak 2011 and winter peak 2012.
As long as NGAJ0 remains under resistance around 5.125-5.130, it is positioned to continue its decline towards the lower channel line. That line intersects around 4.776 on 02/23 and 4.738 on 02/25. We also note chart support around 4.860 then 4.759.
Invalidation: a return above 5.130 would compromise the immediate downside potential and point to a rise towards 5.200, then the upper channel line instead (5.380 on 02/19 and 5.361 on 02/22)
