Movements of the natural gas futures since this week's opening indicate that the bears are still in the driving seat. Changing geopolitical moves to trim Russian tyranny to use natural gas as a tool has been the main driver of price for the commodity.
Undoubtedly, today could be a turning point for the natural gas price as the allies ramp up aid for Ukraine. NATO's announcement looks evident enough for Russian President Vladimir Putin to stop using winter as a weapon of war just because his forces are failing on the battlefield.
Natural gas bulls are looking trapped above $7 and could find it hard to breathe above $7.3 amid the thick presence of big bears as the U.S. natural gas could start flowing towards Ukraine and Europe to check Russian attempt to justify its invasion in Ukraine.
No doubt bears are commanding the whole scenario as the demand and supply equation started to favor the bears amid changing geopolitical moves, the same as during the cold war era.
The natural gas futures had hit a low at $4.749 on Oct. 24 after testing the recent peak at $10.005 on Aug. 23, 2022, since then the natural gas futures were coming down in a sliding slope till Nov. 21 with a breakout and tested a high at $7.605 on Nov. 23 before hit the low at $6.497 before closing the last week at $6.711.
Technically, if the natural gas futures do not find a breakout above the upper end of the ‘Ichimoku clouds’ in a daily chart, exhaustion could surge during this week.
Undoubtedly, a breakdown below the immediate support at 200 DMA, currently at $7, will be the first confirmation of a further downtrend to continue this week.
Despite the equal amount of thrust applied by both the bears and the bulls at current levels on Tuesday, the trend could remain in favor of the bears as the U.S. has stepped forward to rescue Ukraine and Europe on Tuesday.
Bulls could find a way to move further only after a sustainable move above the upper end of the ‘Ichimoku clouds’; otherwise, bears will drive the cart during the rest of the week.
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.