Natural Gas futures price seems to be trading at crucial zone, ever used to be proved a first Strong Resistive Zone ($3.688 to $3.777) on many occasions during an up move in the past. After a successive crossover of this 1st Resistive Zone, Natural Gas futures price has to struggle amid its 2nd hardest Second Resistive Zone ($3.777 to $3.888). But, whenever it stayed above these zones successfully for some time, they provided a strong support to Natural Gas futures price in its journey towards a seasonal peak. On analysis of Natural Gas futures in Monthly Chart, one may feel this phenomenon repeatedly occurred in history.
On analysis of Natural Gas futures price in 1 Hr Chart, it seems to be struggling within this Strong Resistive Zone since a gap-up opening on December 26th, 2016.
This struggling movement seems to be caused by both negative and positive news follow at the same time. I categories this news as follows:
Supportive News for an Up Move –
a) Blasts of arctic winter winds during early December, and continuing throughout the month in the U.S., may result a strong spurt in demand,
b) Major decline in impending weekly storage data due on Thursday, which is expected to show a draw in a range between 220 and 233 billion cubic feet in the week ended December 23.
Price Negate News restricting an Up- Move –
a) Natural gas drillers seem to be adding new rigs,
b) Year-end Book Closing may result in year-end profit taking, which may hinder every up-move before December 30th, 2016.
Conclusion – On Analysis of movement of Natural Gas futures price in 1 Hr. Chart, I find that an Up-trend, started from December 12th, 2016 still intact at 12.00.00 on December 28th, 2016 and seems to achieve its entry successfully today itself within its 2nd Resistive Zone. And, on announcement of any further decline in impending inventory more than expectation will definitely push the futures price above its 2nd Resistive Zone. My supposition is that on the first trading day of the 2017, Natural Gas futures price may see a Gap-up opening due to the prevailing cold weather and the creation of fresh buying positions and a sudden evacuation of profit takers from the scenario. A close above 3.866 on December 28th, 2016 will prove to be a decisive factor for the continuation of an uptrend up to January 9th, 2017. A sudden shorts covering after the announcement of impending Natural Gas inventory may cause a quick up-move.
Have a look at the following four Charts (1Hr, 5Hr, Daily and Weekly time zones) of Natural Gas Futures today in the same Chart, as I prepared and explained about possible formation of new seasonal peaks in my analysis “Mapping A Natural Gas Tide Part II“. But don’t forget Stop Loss Order formula while placing any order. Let us see what the impending Natural Gas inventory and the weather announcement for us in Store.
Disclaimer: This analysis is purely based on the technical observations. I do not have any position in natural gas. One can create position in natural gas at his/her own risk.