- Natural gas seems to be consolidating in a narrow range.
- Natural gas bears seem to be waiting for fading of a sudden change in Heating Degree Days that changed suddenly on Wednesday.
- Bulls are trying to form a base at $2.748 before heading towards their next destination at $2.889.
Bulls could even hit the psychological resistance at $3 before April ends.
Despite a lower injection during this week, natural gas futures have been consolidating above $2.7 since the formation of a post-inventory announcement on Thursday which seems to be a favorable scenario for natural gas bulls but, the bears look to be waiting for a rally in natural gas futures at least above $3.155.
Natural gas bulls could make an aggressive move during the last week of April 2021 amid a sudden spurt in Covid-19 cases that may disrupt natural gas production. Secondly, bears could feel reluctant to come forward in a commanding position due to growing bullish sentiments at this time when the Natural Gas futures look ready for an eruptive move after sustaining above $2.777.
Natural gas futures could face immediate resistance at $2.748, followed by $2.889 and $3.056. On the lower side, futures could find first support at $2.688, followed by $2.568 and $2.492. There is no doubt that the volatility could continue to exists during the upcoming week but, a gap-up opening above $2.889 may confirm the advent of a breakout move to test the psychological resistance at $3. And if the psychological resistance turns into psychological support, natural gas bulls could move towards their final target at $3.155.
Conclusion
On analysis of the current position of LNG and UNG reflecting the quantum of indecisiveness seems to be growing that may result in a breakout or a breakdown shortly. Though, the natural gas futures have been trading in a narrow range which is likely to see an eruptive move soon. I find that the overall trend of natural gas futures, LNG, and UNG indicating a breakout from here if the futures maintain above the level of $2.788 till this weekly closing.
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.