Natural gas could favor bullish sentiments during the upcoming week as Friday’s reversal was steeper than expected due to a sudden surge in demand amid growing fear of power outage amid pollution control efforts by the US.
On the other hand, hot weather could follow the weekend with highs in the upper 80s to 110s, hotter than California to Texas. But a weak tropical system remains stalled along the US Gulf Coast with heavy showers and local cooling. On the other hand, a weather system with showers and comfortable highs of 70s and 80s will track across the Great Lakes, Ohio Valley, and the North for the next few days could ease demand slightly.
Events That Cold Influence Traders
I find some terms that could continue to influence the traders’ psychology that could tilt the natural gas prices downward or upward. Like Gas Pipelines, Gas-fired Plants, Pollution Control, Inflationary Pressure, LNG for trucks, Old Ships, Gas Storage and Power Outages, etc.
Technical View
In the monthly chart, the natural gas prices are showing good strength as Friday’s closing is at the same level that had witnessed a breakout move in December 2007. A breakout above the immediate monthly resistance at $7.767, followed by a breakout above $8.520 in August 2022, will be a primary indicator for the continuation of the bullish trend during the upcoming months.
In the weekly chart, natural gas prices have shown a bullish weekly move after the base-formation at $5.330 during the last and last-to-last weeks. If the prices start the upcoming week with a gap-up opening well above the immediate weekly resistance at $7.245 and sustain above that on Monday and Tuesday will provide an initial clue about the continuity of the bullish trend despite growing volatility ahead.
In the daily chart, the natural gas prices have shown a steep uptrend after finding sufficient support at 9 DMA last Tuesday, followed by a strong reversal on Friday. Suppose the natural gas prices start the week with a gap-up above the immediate resistance at 26 DMA and sustain. That could confirm the continuity of the uptrend during the upcoming week. But a breakdown with a sustainable move below $6.290 could push the natural gas prices to test the psychological support at $6.
If natural gas sustains well above the 26 DMA in the daily chart, the overall trend could remain upward till the weekly closing. I find that a weekly closing by the natural gas prices above $8.6 in the upcoming week will keep the trend upward during the upcoming weeks.
Disclaimer: The author of this analysis does not have any position on natural gas prices. Readers are advised to take any position at their own risk; as Natural Gas is one of the most liquid commodities in the world.