Natural Gas: Price Action Seems To Be Repetition Of 2018
Satendra Singh | May 07, 2021 10:15AM ET
While analyzing the most liquid commodity of this world, I find that the efforts to define the probabilities of the next directional move become extremely difficult because an analyst can never define the direction of the waves; come out with collective human behavior.
This makes the natural gas move against all odds while the collective behavior starts ignoring the fundamental, generally define the direction of the natural gas price.
The second important thing is the recognition of a directional move. It defines the number of people who timely recognize the behavior of the natural gas price action because no analyst can summarize the cyclical patterns of natural gas futures in terms of principles of physics. These patterns are more influenced by the psychological behavior of a large number of natural gas traders.
This mindset defines the short and long-term support and resistance levels for natural gas futures. I find that currently, the natural gas futures are amid the psychological support ($3) and psychological support ($2.521). Undoubtedly, the natural gas futures are bound to take a buying spree from the levels like $2.777, $2.889, and $2.912 before attempting to breach the psychological resistance.
I find that the repeated attempts of natural gas bulls in the last few trading session have increased the possibilities of a breakout above $3.056 shortly. This aggressive move of natural gas futures could encourage big bulls to enter the scenario shortly. I find that a sustainable move of natural gas futures could ensure an eruptive move towards $3.2 during the upcoming week. Undoubtedly, this upward move will not without bouts of selling spree above $3.153 but the bulls could turn more aggressive if the psychological resistance at $3 turns into psychological support; as we have seen this change during the month of September 2018.
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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 of the world.
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