Natural Gas Hesitates to Break Above $2.764
Satendra Singh | Feb 16, 2023 23:43
The movement of natural gas suggests a slow and steady trend following a low of $2.343 on Feb. 3, which was the last point that natural gas producers could anticipate at that time.
This was due to growing production and a decrease in supply flow in June 2022 after Freeport LNG was knocked offline.
Although natural gas futures are still bearish due to mild winter weather in the US, they appear to be forming a base below $2.514 this week, indicating a potential breakout.
Despite facing selling pressure on upward moves, increasing volatility suggests a potential upward movement from current levels.
Since Feb. 15, the prices have maintained an uptrend at a 54-degree angle and are expected to break above the immediate resistance at $2.656 in today's trading session.
If the prices can stay above the second significant resistance at $2.764, despite lower withdrawal from stockpiles last week, it may result in an unexpected upward price swing that could continue until the end of the week.
Since Feb. 3, the price has faced strong resistance at $2.616, but there may be a breakthrough in today's trading session as momentum is quite bullish.
From a technical perspective, the price is currently trading above its 200 DMA (at $2.488) in the hourly chart, with a bullish crossover formed as the 9 DMA crossed above the 18 DMA.
There is a strong possibility of a significant rally in today's trading session that could break above the potential obstacles.
Based on this, I believe that if the prices continue their current uptrend after the inventory announcement, they could soon retest the $3.168 level.
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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