Upon analysis of the wobbly moves since Tuesday, when the natural gas futures tested the two-year high at $4.55, Thursday might be a cozy one, as the inventory announcements after a few minutes could turn the trend in favor of the bears.
Undoubtedly, the advent of spring might start in the third week of this month, keeping the withdrawal level at a slower pace this week which could intensify the bearish pressure on natural gas futures which are currently holding in the overbought territory, above $4.444.
I anticipate that still fear keep the natural gas bears since this Tuesday, but the current weather outlook seems sufficient to console them to remain aggressive ahead amid growing concerns over geopolitical moves.
Technical Levels to Watch
In the weekly chart, natural gas futures are trying to defend the significant support at 200 DMA at $3.919, and a breakdown awaits this week to push the futures to test the next support at 9 DMA at $3.835, and a breakdown below this significant support could push the futures to hit the next support at 20 DMA at $3.473.
Inversely, if the natural gas futures maintain the current bullish tone immediate resistance can be seen at $4.510 and the next resistance will be at $4.727.
I anticipate this week’s closing levels will define the scenario more clearly.
In the daily chart, natural gas futures are showing a decline after hitting the two-year high this Tuesday, indicating a slope in the resistance level, despite the reversal in today’s trading from the day’s low at $4.351.
In such a scenario, bears could turn aggressive soon after the announcement of natural gas inventory levels after a few minutes, as this could be the end of bullish inventory levels.
Undoubtedly, if the natural gas futures do not hold immediate support at $4.370, the next significant support is at $4.189.
I anticipate that the natural gas futures could show some wobbly moves after the inventory announcement if the immediate resistance is at $4.477 and the next significant resistance is at $4.510.
Inversely, if a breakdown occurs below the significant support at $4.212, the next support can be tested at the 9 DMA at $4.134, and a breakdown below this will indicate the advent of selling sprees till this weekly closing.
Disclaimer: Readers are advised to take any position in natural gas futures at their own risk as this analysis is based only on observations.