After a gap-up opening, natural gas finally defined the limits for the trapped bulls at $9.547 on Monday.
The natural gas bulls are battling hard to breathe above $9.4 as the bears have already turned more aggressive since natural gas lost all gains on Friday.
Monday, natural gas attempted to test the opening levels but found sellers too hard to find a breakthrough above $9.547 as the selling bouts continued on every upward move amid growing volatility.
Technically speaking, in a daily chart, natural gas is trading below the 9 DMA, indicating that a confirmative candle could follow Friday’s Exhaustive Candle with the day’s closing below $9.
In an hourly chart, natural gas has already formed a bearish crossover with 9 DMA, and 26 DMA has crossed the 200 DMA on the downside, which could continue the selling spree for a long time. A sustainable move by natural gas below $9.058 will confirm an advent of a steep fall.
Most traders doubt the strength of the bulls, but a few are still confident about a final attempt by the bulls to cross $10. Some hedge funds are still attempting to convince the traders about the strength of the bullish trend by ignoring the fundamentals that had already tilted to favor big bears to trigger selling.
I find that natural gas could finally signal the further directional moves on Monday as a breakout above $9.664 with a sustainable move will confirm the continuity of the current uptrend. If otherwise, natural gas could find a breakdown below $8.895 in today’s trading session.
Finally, I conclude that natural gas is already trading in the overbought territory and look to have started exhaustion during the last week, which could get a confirmation in the first two trading sessions of this week.
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.