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Natural Gas: Double Top Could Attract Big Bears

By Satendra SinghCommoditiesMay 25, 2022 08:20AM ET
www.investing.com/analysis/natural-gas-double-top-could-attract-bears-200624848
Natural Gas: Double Top Could Attract Big Bears
By Satendra Singh   |  May 25, 2022 08:20AM ET
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On Monday, natural gas futures showed a monster move as I pointed out some technical formations before the advent of price reversal by the natural gas.

On Tuesday, the futures traded in a tight range from $8.698 to $9.011 as this seems to be a turning point for futures due to the occurrence of some price exhaustion after a sudden steep surge.

Undoubtedly storage phobia among the European countries is still intact since the European Union plans to start jointly buying gas before winter, the bloc's energy policy chief said on Monday, as it seeks to cut reliance on Russian fossil fuels and build a buffer against further energy supply shocks.

On the other hand, the futures have been trading at a crucial juncture that could continue to increase price volatility as the traders could turn aggressive once they find a definite clue about the next breakout above $9.316 or a breakdown below $8.282.

Futures could remain choppy till this weekly closing as traders are looking for some clue from the upcoming inventory on Thursday.

Natural Gas Futures Weekly Chart
Natural Gas Futures Weekly Chart

Technically speaking, in a weekly chart, futures are trading near completion of a double top that could result in a sudden sell-off as they are facing resistance above the recent high at $8.989 during the first week of May 2022.
Natural Gas Futures Daily Chart
Natural Gas Futures Daily Chart

In a daily chart, futures are currently trading at $8.917 after testing the day’s high at $8.982, and the day’s low at $8.805 looks evident enough to show exhaustion. Undoubtedly, a breakdown below $8 could turn the current trend in favor of the natural gas bears.
Natural Gas Futures 1 Hr. Chart
Natural Gas Futures 1 Hr. Chart

In the hourly chart, bearish scenario becomes more visible as the two exhaustive candles have already formed during the last two hours. Undoubtedly, the current position is still above the bullish crossover, but a sustainable move below 26 DMA, currently at $8.853, will confirm the advent of a breakdown.

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.

Natural Gas: Double Top Could Attract Big Bears
 

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Natural Gas: Double Top Could Attract Big Bears

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Comments (3)
Marc Gerecke
Marc Gerecke May 26, 2022 3:28AM ET
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Or..gee..you don't think the huge gains over the last few days necessarily involve common-sense "profit taking", therefore, in other words...meaning that the trendline is moving regularly, dramatically, and obvious indicator of future gains? You think maybe sometimes you tend to "overthink" things, a tad? Hmm? I know, I get the same criticism on occasion, so we're birds of the same feather, to some extent...but technical analysis is only of any value if matched with common sense fundamental value evaluation, in combination with blatant geopolitical factors? Hmm...come on...snap out of it. Common sense actually DOES come to bear.
Youngjin Go
Youngjin Go May 25, 2022 9:27AM ET
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thank you
shaikh uzaif
shaikh uzaif May 25, 2022 9:03AM ET
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Sir in last ur analysis you told market gonna sell but it's buy side
Kumar Gyan
Kumar Gyan May 25, 2022 9:03AM ET
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Read complete analysis not just subject line
durga laxmi
durga laxmi May 25, 2022 9:03AM ET
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last analysis buy side only great analysis bro
 
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