Natural Gas futures tested a new low this year last Friday at $2.221 before closing the week at $2.266, indicating a gap-up opening could be the first step by the bulls on the first trading session of the upcoming week.
Last week, bears triggered selling and soon found a supportive bearish inventory Thursday and continued to command the scenario Friday.
No doubt the same bearish scenario was there during the last week of December 2021, when natural gas futures hit a low at $2.238 on Dec. 28, 2021, and continued to rally up to $2.889 till Jan. 12, 2022.
This time a low at $2.221 per million cubic feet (mmcf) has fetched global attention as this price is even below the production cost in some areas of the US and could encourage it to go long, the same as we have seen at the beginning of this year.
Technically speaking, in the 15-Minute chart, if the prices find a sustainable move above the significant resistance at 200 DMA, which is at $2.412, it could regain its position above the pivotal point at $2.512 during the first two trading sessions of the upcoming week.
Undoubtedly, selling sprees will be there above 200 DMA. But if the futures hold significant support at $2.282, strong buying could resume during the upcoming week.
As NatGasWeather.com tweeted on Feb. 17,
“New EC Weekly for EIA Weeks Feb 24-Mar. 2 and March 3-9 are rather chilly western and northern US for regionally strong demand but would be more intimidating if not so warm South and Southeast US.”
I believe natural gas futures could resume strength during the upcoming eleven trading sessions and could be full of volatility as the wild price swings could follow the moves from Dec. 28, 2021, onwards.
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 of the world.