Commodities Analysis & Opinion

Natural Gas: What Makes the Reversal a Silent Move?


Movements by the natural gas futures since Dec. 13, 2022 indicate a steep fall from $6.871, amid messy weather announcements, remained noisy as the natural gas prices hit a new low below $3 this Monday.

Undoubtedly, this steep fall attracted big bulls to come into the fray as the natural gas futures found an equally strong reversal – I mentioned this expected natural gas price action in my last piece.

Natural Gas Futures Daily Chart

Technically speaking, in a daily chart, the natural gas futures have formed a bullish hammer this Monday, which is about to complete the next confirmation candle in today’s trading session.

On Tuesday, the natural gas futures are trying to sustain above the 9 DMA, which could provide more strength to bullish momentum till the weather turns cold on Jan. 28.

Undoubtedly, the initial signs in first two trading sessions of this week favor bulls to move against all odds if they sustain above the immediate resistance at $3.389.

On Monday, the natural gas bulls remained aggressive enough to capture the immediate target at $3.258 despite heavy selling pressure during the day.

On Tuesday, traders are still in dilemma whether to go long or to remain on the sidelines as they are still full of skepticism after the recent selling in natural gas but gaining confidence after yesterday’s reversal.

Natural Gas Futures 15-Minute Chart

In a 15-Minute chart, the natural gas futures holding above the 200 DMA, at $3.188, ensuring a short-term breakout above $3.520 soon.

Undoubtedly, if the natural gas futures find a breakout above this turning point, wild price swings could surge from Jan. 28 onwards as the bulls could turn aggressive once the natural gas futures hold above this level before this week’s closing.

In conclusion, the natural gas futures could continue Monday’s move if the confirmation candle completes its formation on Tuesday.



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