While most of the traders were expecting the natural gas futures to slide further after a breakdown below $8.590 on May 31 but I could feel the thick presence of big bulls below $8.2 as I openly came forward with my idea to go long in my last analysis.
The natural gas futures tested a low at $8.153 on Jun. 1. After that, the prices reversed as this time, the day's close was a little higher than the day’s low on May 31 at $8.125, just near the ‘launching pad’ at $8.64.
The natural gas prices are still maintaining an uptrend on Jun. 2 before the announcement of the weekly inventory. Natural gas is currently sustaining well above $8.888 – psychological support for the bulls.
There could be more volatility after the weekly inventory announcement. The weekly injection could be near 89 Bcf, the weakest injection during summer for quite a while.
In an hourly timeframe chart, natural gas could continue the current uptrend and if it sustains above the 200 DMA post-inventory, expect high volatility.
Only a sustainable move below the 26 DMA, currently at $8.571, could keep the bulls in check. But a breakout above $9.011 could force the trapped bears to cover their shorts as the prices could hit the recent peak once again before this week's closing.
In conclusion, if the price finds a sustainable move above $9.432, the bulls could hit the next target at $10.222.
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.