Movements of natural gas futures since the weekly opening suggest the possibility of an explosive rally, as prices remain above the weekly gap-up.
Natural gas bulls are seeking significant support above $2.388, anticipating increased heating demand due to a change in weather during the last week of April 2023.
Technically, in the 1-hour chart, natural gas futures are still above the weekly gap-up opening, indicating potential for a surge that could push prices above $2.548.
In the 15-minute chart, natural gas futures briefly touched the 200 DMA before rebounding in today’s trading session, indicating changes in sentiments when the power demand and short supply of natural gas due to decreasing production are likely to keep the price trend in favor of the bulls.
However, natural gas futures could encounter resistance at $2.767 in case of a sudden move in a day or two, and if they hold above this level, bulls could attempt to test the next resistance at $2.806 before the weekly closing.
Natural gas prices are likely to experience significant price swings, with the bulls eyeing $3.2 before the weekly closing.
On the lower side, bears may attempt to short above $2.5, and a short-covering rally is likely once the futures remain above this immediate resistance
Undoubtedly, any sudden downward movement may provide a buying opportunity, with buyers looking to restart buying above $1.888 and anticipating a sharp reversal during the week.
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Disclaimer: The author of this analysis does not have any position in natural gas futures. Readers should take a trading position at their own risk, as natural gas is one of the most liquid commodities in the world.