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Natural Gas Futures Show Signs of Breakout from Bearish Trend

Published 12/02/2023, 09:22
Updated 09/07/2023, 11:31


The movements in natural gas futures in the last week indicate a breakthrough out of the bearish sentiments as the weekly closing witnessed a pause in selling sprees, and short-squeezing helped to regain strength.

Despite Friday’s reversal, natural gas futures remain in bearish territory until they sustain above the immediate resistance at $2.658.

As I wrote in my last piece on Friday, this expected bounce was indicated as the weekly low of the last week was well above the previous week’s low at $2.341.

This was the first time in a while for natty to deliver some fresh hope for the bulls, after a steep fall in the last weeks as the messy weather reports continued to keep demand low.

Last week, the EIA reported gas-in-storage stood at 2.366 trillion cubic feet, up 10.9% from the year-ago level of 2.249 trillion cubic feet.

The weekly inventory announcement last Thursday showed a withdrawal of 217 billion cubic feet, resulting in this reversal which continued till the week’s close.

Undoubtedly, Monday's weekly opening and follow-up moves will finally define the further directional trend.

Despite increasing volatility, a natural gas price spike is still on the cards, but depends upon the confirmation of a breakout above the significant resistance at $2.790 during the upcoming week.
Natural Gas Futures Weekly Chart
Technically speaking, in a weekly chart, natural gas futures indicate probabilities of a gap-up opening as the futures had recovered more than 7% after falling more than 11% during the last week.

200 DMA still looks to be a significant resistance in a weekly chart at $3.754, which could be a challenge for the bulls.
Natural Gas Futures Daily Chart
In a daily chart, on Friday, natural gas futures sustained above 9 DMA, which is at $2.888, indicating that if the futures start the upcoming week with a gap-up opening, they could try to hit 18 DMA, which is at $2.815.

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.

Latest comments

took short position ,after your bullish view, lets see
yes , going down, after your bullish view, again
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