Natural Gas: Weekly Closing Likely to Make the Trend Clearer
Satendra Singh | Jan 14, 2023 01:14
Movements of the natural gas futures during this week indicate a thrust by the bulls and bears to keep the price trend in their favor, which was crystal clear with this week's candle.
Equal wicks on both sides of a small red body in this weekly candle have enhanced the importance of the weekly closing level on Friday.
Despite the double bottom formation, natural gas futures crossed Dec. 30, 2021 low at $3.536, and hit a low at 3.423 on Jan. 11, 2022, but remained above Jul. 2021 low at $3.393.
h2 Technical Formations/h2Weekly Chart
A steep fall in the prices during the last four weeks created uncertainty and increased the possibility of wild price swings during this week.
Despite a steep fall, initial signs of reversal are visible in the weekly chart as the body of this week's candle is still red and smaller but still holding because of significant support at 200 DMA, which is at $3.735.
If natural gas closes this week a little above the 200 DMA in today's trading session and the small red body of this candle turns into green could make the trend clearer.
And, despite the announcement of highly bearish inventory on Thursday, the prices are still reversing. This could make it likely for the small red body of the weekly candle to turn green before today's close.
Daily Chart
Since testing this week's low at $3.423 on Jan. 11, natural gas futures are trying to reverse on Friday after witnessing a wild swing on Thursday, indicating the presence of bulls at much lower levels.
The first resistance will be at 9 DMA, which is at $3.802, and the second is at 18 DMA, which is at $4.315. This level could turn the bulls aggressive if the prices start the upcoming week above $4.112.
15-Minute Chart
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Natural gas futures are currently sustaining above the 200 DMA along with 9 DMA and 18 DMA, indicating that another wild price swing is likely before today’s close.
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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