Natural gas futures, showing strength since today’s opening, hitting the immediate target at $4.040 at 02:20 A.M. After maintaining for a few more minutes above this immediate support, the bulls hit the next target at $4.074 at 03:30 A.M. and finally continue to move upward at 05:00 A.M.
It looks like a breakout above $4.104 at 07:00 A.M is likely. Undoubtedly, the bulls look too aggressive to move upward with a supportive surge in supply to fuel-starved Europe during this month.
The current cold snap in the US looks quite supportive for natural gas, despite the fact that any breakdown below the immediate support of $3.858 could keep the futures under selling pressure.
But a sustainable move above $4.106 might be a primary indication for the bears to cover their shorts. Futures could take a decisive move at 07:00 A.M.
The most important part is the sudden surge in daily volume at 12:15 P.M. which generates a decisive move, while this volume-generated move looks to be in favor of the bulls.
I find that these two points in today’s trading session might be decisive for the trend that will be decided by the post-inventory moves on Thursday at 10:30 A.M. The inventory-generated moves could be extremely volatile.
On the upper side, a breakout above $4.242 could push the futures to test $4.763 before this weekly closing while on the lower side a breakdown below $3.811 could push them to test $3.519 during this week. Undoubtedly the escalated conflict between Russia and Ukraine would be likely to further increase energy costs for many countries.
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.