Natural Gas: Gap-Up Opening Is Bullish
Satendra Singh | Jan 16, 2023 20:25
Since I wrote my last piece, most traders were shocked by the steep fall in natural gas last Thursday and Friday, as warm weather was the main concern.
A weekly gap-up opening indicates the entry of big bulls who look confident about the limited downside below Friday’s low.
Since the weekly opening, natural gas' movements indicate a renewed strength among the bulls, who look ready to take command on Monday despite prevailing selling pressure as the weather could take a U-turn from Jan. 24.
In the 15-Minute chart, the prices look ready for a breakout around 06:30 a.m. in today’s trading session if the prices manage to stay above the immediate support at $3.555 till 06:00 a.m.
A sustainable move above the immediate resistance at $3.942 will confirm a breakout.
I believe that the wild price swings could continue as the journey for the bulls will not be easy till the next significant change in weather outlook.
Monday’s move matters, as it indicates the bulls' strength. Small bulls could still be skeptical after a steep fall last week.
Still, every upward move will be seen as a fake breakout, as the upcoming weekly inventory will also be bearish due to the current warm weather in most parts of the U.S. and Europe.
Momentum matters a lot when trading natural gas futures. It could keep the trend upward or downward against all odds.
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 in the world.
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