Natural gas bulls look to cross the next psychological resistance at $7 before this weekly closing as the weather could remain hot during weekends.
Natural gas is currently showing good strength above $6.084, which seems to be a good entry for bulls with a stop loss at $5.892. This position provides a risk/reward ratio of 1:4 till this week's closing.
The volatility could remain high before weekly closing, and the overall trend favors the bulls. The prices remain above the gap created on Thursday after the announcement of the weekly inventory, as I predicted a bumpy move in my last analysis.
The immediate resistance is at $6.488. But a breakout above this level could push natural gas above $6.889 in today’s trading session. The momentum looks quite strong since the investors returned their focus to tight supply despite nagging fears of a potential global recession.
A weekly closing above $7.2 will be the primary confirmation of the bullish trend during the upcoming week amid growing volatility.
Disclaimer: The author of this analysis does not have any position in natural gas. Readers are advised to take any position at their own risk, as Natural Gas is one of the most liquid commodities in the world.