Natural Gas: The Way Bulls Leapt, Leaving Bears in the Dust

Upon analyzing the movements of the natural gas futures since the opening of this week, I anticipate that the opening gap up attracted big bears to shoot the flying saucer in time, and they are still in the fray amid hopes of retreating warmth with the advent of the springs.

Undoubtedly, the natural gas futures created a big gap on Monday, hitting a new high at $4.932 after testing significant support at 9 DMA last Friday. They are again trying to retest this support on Wednesday after a steep slide from Monday’s high.

I anticipate that if the natural gas futures do not hold this significant support at 20 DMA at $4.111, a steep slide is likely to continue this week.

Undoubtedly, natural gas bulls are likely to defend their territory as the Accuweather reports confirm the possibilities of a wild storm with everything from severe thunderstorms and tornadoes to high winds; dust and wildfire dangers will also bring snow and blizzard conditions to parts of the north-central United States.

On the other hand, this Thursday’s announcement of natural gas inventory levels will likely fuel the bears’ remaining aggressive behavior this week.

Undoubtedly, indecisive moves by the natural gas futures this week have surprised both the bulls and bears and are likely to surge uncertainty as the weather is expected to remain full of surprises before the advent of this spring.

Technical Levels to Watch

In the daily chart, natural gas futures are trying to defend the significant support at 9 DMA at $4.306 and look ready to break this support to head towards the next supporting levels at 20 DMA at $4.112 and 50 DMA at $3.815.

Inversely, in case of any upward move, the immediate resistance will be at $4.461 and the next resistance will be at $4.551.

In the weekly chart, natural gas futures are under bearish pressure due to a bearish hammer within the first three trading sessions this week looks evident enough to intensify the selling pressure during the upcoming weeks.

Undoubtedly, this week’s bearish hammer could find the next bearish candle next week if not maintain above the significant support at 200 DMA at $3.925.

Inversely, any bullish move from the current levels will provide a good opportunity to take a short position below the immediate resistance at $4.552.

Disclaimer: Readers are advised to take any position in natural gas futures at their own risk as this analysis is based only on observations.