Natural Gas: $3 Likely a Pivotal Point for Bulls
2023.01.22 12:12
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Analysis of in a weekly chart indicates that despite an 81-degree fall in natural gas prices in the last nine weeks amid warm weather conditions at this time of winter seems to be an .
This steep fall has propelled fear among the bulls, as the selling pressure has increased manifold, as natural gas futures had found a breakdown below 200 DMA, which is at $3.754 in a weekly chart.
Now, 200 DMA has become a significant resistance for the bulls, as every rally finds a sell-off during the last three weeks despite repeated attempts by the bulls.
On the other hand, $3 is a pivotal point for both the bulls and bears this time, while the winters still have to pass through a significant portion of this season despite a messy weather pattern for the next six days.
Natural Gas Futures Weekly Chart
Technically speaking, in a weekly chart, natural gas futures are currently trading below the 200 DMA, despite some reversal during the last few hours from the weekly low at $3.091 is merely an initial indicator of the thick presence of big bulls below the weekly close at $3.174.
Undoubtedly, the weekly opening levels will define the further intention of both the bears and the bulls as sustainable moves by the natural gas futures, above or below $3, will confirm the next direction for the natural gas prices.
On the bullish side, a gap-up opening above the immediate resistance at $3.535, followed by sustainable moves above this level, could result in a breakout above the 200 DMA.
On the bearish side, a gap-down opening below the immediate support at $3.101, followed by sustainable moves below this level, could push the natural gas futures to test the next significant support at $2.880.
Undoubtedly, a sharp reversal could generate a heavy buying spree by the desperate bulls despite the odd weather conditions.
I conclude that the whole focus will revolve around $3 during the first two trading sessions of the upcoming week as the weather could turn colder from Jan. 28 – Feb. 2.
Disclaimer: The author of this analysis does not have any position in Natural Gas futures. Readers are advised to take any position at their own risk; as Natural Gas is one of the most liquid commodities in the world.
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