Natural Gas: Despite Surging Volatility, Exhaustion Likely to Hit $2 Next Month
2025.01.30 06:36
Upon analyzing the movements by the for Mar 25 (NGH5), I find that despite surging volatility, exhaustion is likely to continue in Feb. 2025 as the current scenario indicates a decline in futures prices comes after the weekend’s weather forecast for a milder projection.
Last week, a severe Arctic blast swept across a large portion of the U.S., an event that is likely to be reflected in a bullish inventory report this week.
Undoubtedly, the front-month futures contract for natural gas has seen a substantial decrease, and now trading at $3.165, it could see a steep slide after the announcement of weekly inventory today.
I find that the bulls could try to beat the bears for a while today, but the selling spree could follow any upward move by the natural gas futures since Federal regulators have given permission to Venture Global to introduce natural gas into the seventh block of its Plaquemines plant in Louisiana as the company continues to ramp up production of the super-chilled gas.
On Wednesday, natural gas futures showed some strength. Still, they could not sustain above the immediate resistance at 50 DMA at $3.474 due to a surge in bearish pressure after the formation of a bearish crossover by the 9 DMA and 20 DMA in the Daily chart.
On Thursday, the appearance of a gap-down opening, followed by narrow-range trading by natural gas futures, confirms the continuity of bearish pressure at the current price levels.
Today, natural gas futures are teetering at a pivotal point at 100 DMA at $3.207 with the formation of an exhaustive candle, indicating a steep slide despite a bullish move, if any, after the weekly inventory announcement.
Disclaimer: Readers are advised to take any position at their own risk as this analysis is based only on observations.
