Natural Gas Futures price recovery on Friday from the weekly low of $2.732 and finally closed at $2.798 shows the presence of buyers in this zone. On analysis of the movement of natural gas futures price during the week ended on February 24, 2017 in a weekly chart, formation of a “Bullish Hammer” indicates a strong up move during the coming weeks. Secondly, we cannot ignore the El Nino effect on weather which may cause the winter to linger throughout the month of March, 2017. Record level warm during a cold weather season makes this possibility of escalation of winters during this year a new expected one more phenomenon to add in weather records.
On analysis, the movement of natural gas futures price in different time zones, I find an exhaustive candle formed during the week ended on December 30th, 2016; natural gas futures price started a downward journey since then continuously. Now, the formation of a “Bullish Hammer” ensures the possibility of a beginning of an uptrend. Thought, the uptrend will be too tidier due to a strong struggle between bulls and bears at different stages but current of the uptrend will be too strong to support every profit selling during the coming weeks.
After analysis of the movement of natural gas futures in different time zones, I have defined this uptrend move in an Expected Trading Zone for the period from March to September 2017 (within four trading sub-zones A, B, C and D) in the following weekly chart. If any strong up-move wave brings the price in Upper Zone of this Expected Trading Zone, may witness the presence of Bears to create fresh shorts. Uptrend will keep the price movement around its mean-line which will make its continuity more sustainable.
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.