Natural Gas Could Move Lower
Satendra Singh | Jan 28, 2022 07:14AM ET
Thursday, the natural gas futures surged higher after the inventory announcement. February contracts Tested a seasonal peak at $7.400 after starting the day at $4.230. But on rollover, the March contracts surged higher up to $4.219 after finding a strong base at 200 Days Moving Average that is currently at $4.174.
February contracts witnessed short-squeezing above $5.5, pushing prices to hit a fresh seasonal peak at $7.400. Undoubtedly, this was the level I defined for the natural gas futures for February Futures during the last week in my articles and the YouTube videos. But the traders preferred to criticize and were bound to ignore this winter move amid changing weather-related announcements.
Although the contradictory weather reports are still on the warm side for the next 6-10 days, I find that the weather might be cooler than usual for the next 15 days as the current strength of the March contracts still look too strong to remain in positive territory up to the mid of February. If the natural gas futures find a weekly closing above $5.153 today, this will confirm a gap-up opening on the first trading session of the upcoming week.
Technically, the peak witnessed by the February contract has set a destination for the bulls to expect new avenues during the next three weeks as the natural gas futures never stand along with a single peak. Bulls continue to bounce to test recent highs as the natural gas futures witnessed during October 2021.
The natural gas futures have entered into the same territory as they did in the last two weeks of January 2014 before moving downward. Undoubtedly the current momentum looks evident enough to repeat the same peaks soon. Volatility could remain higher but, the bulls look too reluctant to be aggressive with the supply of the US natural gas to a fuel-starved Europe during this month.
Get The News You Want
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.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.