In my last analysis last Saturday, I predicted a gap-up opening for the natural gas on the first trading session of this week. The natural gas behaved as per expectations amid growing bullish sentiments on Friday, with weekly closing above $4, after the US warned of a Russian invasion of Ukraine.
Natural gas has been maintaining an uptrend zone since this weekly opening as the chilly lows of 0s to 30s deep into the South and Southeast. I find that a swing back to light demand may occur on Wednesday or Thursday as a warm break sets up over the southern and eastern with comfortable highs of the 50s to 70s.
However, another frosty weather system will track into the Midwest. It could move eastward on Friday or Saturday with another round of lows of 0s to 30s that could rejuvenate higher demand for natural gas.
The bulls, resting at $4.2, confirm the growing aggressiveness. Undoubtedly, a breakout above $5.2 will be the first confirmation of this upward move to hit $5.8 during this week.
On the lower side, natural gas could find strong support at $3.931 with value-seeking traders. Undoubtedly, the immediate support is at $4.040. This level has turned back into strong support now once again. Natural gas could take a decisive move today between 07:00 A.M. – 08:30 A.M.
Technically speaking, if the price holds $4.3 between 07:00 A.M. – 08:30 A.M., a steep surge could result in a short-covering rally today that could encourage bulls to hit $5.2 in today’s session. But this level needs a sustainable move. The bears could turn aggressive any time if the weekly inventory doesn’t find expected withdrawal this Thursday.
Disclaimer: The author of this analysis does not have any position in natural gas. Readers are advised to take any position at their own risk, as Natural Gas is one of the most liquid commodities in the world.