The natural gas futures started this week with a gap-down opening amid growing concerns for lower demand due to the shifting weather outlook for mild weather for the next 8-14 days.
But I find the weather could take a U-turn any time during this week, as an Arctic blast lingers over Texas and the South with frigid lows of 0 to 30s, while dangerously cold over the Midwest and Ohio Valley with lows of -20s to 10s. The Arctic front will gradually advance into the East while fizzling in strength but still impressively cold and with areas of rain and snow.
My views on the price movement of the natural gas futures are still bullish, while the bulls are still looking eager to hold $4. Amid the geopolitical tension between the US and Russia, natural gas prices could feel the impact this week.
Despite a fall of 7.5% on Monday, the prices found some bounce back from the day’s low at $4.121, showing the value-seeking buyers still prefer to hang at this psychological support before moving upward against all odds.
Technically speaking, natural gas could find a strong bounce from the current level. Immediate support in 1 Hour Chart is $3.888, and the next support is $3.858 for Tuesday. And immediate resistance is at $4.288 and the second at $4.487. If it finds a breakout in today’s trading session, the next major resistance could be tested at 200 Days Moving Average, currently at $4.681.
In a 4 Hr. Chart, a reversal from the day’s low, looks evident enough to continue on Tuesday as the natural gas futures are still showing strength above the psychological support at $4.
In a Daily Chart, natural gas has given the first signal of strength as the buying primarily visible at the bottom may attract big bulls to go long for an immediate target at $5.5. In a zoomed version of a Daily Chart, the lower end of the Ichimoku Clouds looks evident enough to provide sufficient support to the natural gas futures.
A sustainable move above $4.888 will confirm an uptrend that may continue during this week to push the natural gas futures to hit $5.5 before 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 in the world.