Natural Gas: Bulls Ready to Roar Soon
Satendra Singh | Jan 11, 2024 08:02
After analysis of the movements by the Natural Gas futures since this weekly opening, I observed that the natural gas prices spiked massively on Tuesday from $2.95 to $3.40 on colder trends, then eased off late in the session to $3.20.
However, demand for natural gas in the US is likely to remain very strong as a frigid cold shot into the US late this weekend through next week with lows of -10s to 30s over most of the US for very strong demand. After analysis of the movements by the Natural Gas futures since this weekly opening, I observed that the natural gas prices spiked massively on Tuesday from $2.95 to $3.40 on colder trends, then eased off late in the session to $3.20.
However, demand for natural gas in the US is likely to remain very strong as a frigid cold shot into the US late this weekend through next week with lows of -10s to 30s over most of the US for very strong demand. I expect the advent of wild cold shots will continue to keep the big bulls in the fray above the immediate support at $3.
Undoubtedly, I had explained this scenario well in advance in my video attached below while the bears were in command. I explained in my last analysis about the advent of this winter breakout in natural gas prices while the natural gas futures were in a consolidation phase from Dec. 12, 2023, to Jan. 1, 2024, and finally, there was a breakout on Jan. 2, 2024, above the immense resistance at $3.
In the daily chart, currently, the natural gas futures, are once again in a consolidation phase on Thursday before the announcement of weekly inventory levels, which is likely to remain around a weekly withdrawal of 119 Bcf. This looks encouraging enough amid increasing hopes for upcoming changes in the current weather situation will be sufficient to keep the bullish sentiments intact as the natgasweather.com has announced in its outlook for Jan. 10 – 16: Weather systems will sweep across the US the next few days with rain, snow, and gusty winds. Temperatures will be mild over much of the South and East with highs of 40s to 70s, while cool to cold over the northern and central US with highs of 0s to 30s. A frigid cold shot will advance into the Rockies and Midwest late in the week with lows of -10s to 20s, then spreading across much of the US this weekend and next week for strong demand. Overall, Moderate demand through Friday, then strong to very strong.
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Finally, I conclude that the natural gas futures could remain volatile after the announcement of today’s weekly inventory, which could provide an opportunity to enter a long position at the immediate support at the 9 DMA, which is at $2.875 and the second support seems to be at the 18 DMA in the daily chart, which is at $2.7 from where an immense reversal will likely for keeping the trend in the favor of the bulls.
Disclaimer: The author of this analysis does not have any position in Natural Gas futures. All the readers can take any position at their own risk, as Natural Gas is one of the most liquid commodities in the world.
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