Natural Gas: Uptrend Intact Despite Growing Volatility

Natural gas futures have been maintaining a consistent uptrend during the past few weeks, which supports continuation, despite extended volatility.

Since the formation of a new peak on Thursday, NG could find a breakout move shortly, as they have tested immediate support at $8.291 before closing the week in positive territory on Friday.

No doubt, bears are sitting above the psychological resistance at $9, but they are too enthusiastic about price moving above $8.332, this after a sharp sell-off post peak formation at $9.432.

Natural gas prices have experienced extended volatility during the past week. Undoubtedly, bulls are confident after sustaining the price above $9.4; a level at which the commodity could find a breakout move above $9.494 during the upcoming week.

The weekly closing level looks quite decisive as the bulls and bears were busy flexing their muscles before the weekly closing since weather conditions over the weekend could generate either a big gap-up or a gap-down on the first trading session this week.

Technically, the monthly chart shows the start of the current uptrend after forming a solid base at 200 DMA in March 2022. The current uptrend looks intact as the 9 DMA and 26 DMA have crossed above the 200 DMA, resulting in a ‘Bullish Crossover’ in March 2022.

On the weekly chart, NG created a ‘Bullish Crossover’ during the last week of March, maintaining the current uptrend amid growing volatility ever since.

The daily chart, reflects exhaustion after the peaks at $9.425 on Wednesday and at $9.432 on Thursday were tested. These extremely bullish attempts show the broad presence of bulls above $8.068.

Finally, volatility could gain more traction as bulls and bears remain active during the upcoming weeks. Russia may continue to punish Europe, while the US President may encourage US refineries, via announcement of a revival package, to increase NG export in order to fulfill global gas demand.

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.