Natural Gas: Winter Storm Uri Could Complete Bullish Handle Formation
Satendra Singh | Feb 16, 2021 06:31AM ET
After repeated attempts to breach the psychological resistance of $3 during the last week, natural gas futures, trying to sustain above this psychological resistance with supportive cold weather.
The winter storm Uri is likely to blanket parts of the South with significant snow and some ice early next week before moving into the snow-fatigued Midwest and East. That has resulted in a big gap-up at the opening on the first trading session of this week.
I find that this gap-up opening could keep the natural gas futures above $3.093; this will confirm the advent of a breakout move during this week. There is no doubt that the $2.888 seems to be strong support below the 9 Days Moving average ($2.895) that is the immediate support, but the final support level is $2.735.
The winter storm Uri could encourage natural gas bulls to test $4 very shortly. This storm will produce snow and some ice much farther south than usual; farther south than seen on Thursday. From there, this storm could then result in significant snow and ice in parts of the Midwest and East. Secondly, the upcoming inventory could show a much higher withdrawal on February 18th than the previously announced during this month.
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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