Natural Gas: Growing Indecisiveness Amid Massive Fight
Satendra Singh | Jan 21, 2018 03:03AM ET
Summary
1. Longer duration of massive fight, between natural gas bulls and the bears, is evident enough for growing confusion and indecisiveness amid the strong advocates of both sides.
2. Both the bulls and the bears are loaded with their valid reasons to move ahead which results in growing uncertain moves due to sudden attacks.
3. Natural Gas Futures price level at $3.184 is being looked upon by both sides (bullish and bearish) with their own angles – angle of elevation and angle of depression. In simple words, bulls are looking the digit 6 as 9 and bears are looking at 9 as 6. In total the whole situation is too grim to be resolved at the earliest with great care.
4. Withdrawal season, which started from the week of November 16th, 2017 after constant 32 weekly injections, going to end during upcoming weeks, most probably from the second week of February 2018 – which will definitely impact demand and supply equation.
5. Most important factor of natural gas futures price – weather seems to be in flip-flop mode as Weather models are inherently volatile and can turn bearish or bullish any moment. Currently colder than normal weather provides good room for the bulls but on the other hand it creates trouble in production and supply pipelines.
Technical Indicators
1. On analysis of the movement of Natural Gas futures price in different chart patterns which I have noted in my last few analysis, I find that the after crossing the price level of $3, Natural Gas futures price seems to be facing enough resistance at the level of $3.223 first and then at $3.286.
2. After facing resistance a sudden reversal appear towards the level of supportive level first at $3.047 and then at $2.967.
3. In this process of sharp moves, Natural Gas futures price has formed a trading zone from 3.011 to S3.244.
4. Only a sustainable move above or below this trading zone will decide the final directional move.
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5. I find the sustainable move below $2.988 will be more worrisome for natural gas bulls which may bring the Natural Gas futures price up to the levels of $2.711.
6. On the other side, I find a sustainable move above $3.333 will open new range for natural gas bulls.
Observations
1. On analysis of the movement of Natural Gas futures price in different chart patterns, I find the appearance of exhaustion amid natural gas bulls after a long fight to sustain their presence deep inside the bears’ territory.
2. Bears seem too eager to restrain every progressive move by the bulls in their territory.
3. Weather seems to turn in favor of bulls on one hand and on the other hand demand side seems to be not enough evident to support the bulls at the current level.
4. I find the current trading zone going to maintain till few more weeks during the month of February, if, any sudden announcement or political commitment not appear.
5. On analysis of the Natural Gas Futures Historical Data From 21-12-2017 to 21-01-2018, I find that the Natural Gas futures price are still trading at 20% gain.
6. I find the good level to go long is at mean average at $2.956 for a short duration, if the price touches this level during a sudden dip.
Conclusion
On analysis of the movement of Natural Gas futures price, I find that the opening on the first trading session, no doubt, will be a gap – down or up – will be a decisive indicator for rest of the Week of January 21st, 2018.
I conclude expected propositional trading zones for the period from January 21st - February 5th, 2018.
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