Natural Gas: Double Top Could Attract Bears
2022.05.25 16:26
On Monday, natural gas showed a monster move as I pointed out some technical formations before the price reversal.
On Tuesday, the futures traded in a tight range from $8.698 to $9.011, as this seems to be a turning point for futures due to the occurrence of some price exhaustion after a sudden steep surge.
Storage phobia among the European countries is still intact since the European Union plans to start jointly buying gas before winter, the bloc’s energy policy chief said on Monday, as it seeks to cut reliance on Russian fossil fuels and build a buffer against further energy supply shocks.
On the other hand, the futures have been currently trading at a crucial juncture that could continue to increase price volatility. Traders could turn aggressive once they find a definite clue about the next breakout above $9.316 or a breakdown below $8.282.
Natural gas could remain choppy till this weekly closing as the traders are looking for some clue from the upcoming inventory on Thursday.
Natural gas futures weekly chart.
In a weekly chart, futures are trading near completion of a double top that could result in a sudden sell-off as resistance lies above the recent high at $8.989 during the first week of May 2022.
Natural gas futures daily chart.
In a daily chart, the futures are currently trading at $8.917 after testing the day’s high at $8.982, and the day’s low at $8.805 looks evident enough to show exhaustion. A breakdown below $8 could turn the current trend in favor of the natural gas bears.
Natural gas futures 1-hour chart.
A bearish scenario becomes more visible in an hourly chart as the two exhaustive candles have already formed during the last two hours. The current price is still above the bullish crossover, but a sustainable move below 26 DMA, currently at $8.853, will confirm a breakdown.
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