Natural gas seems to be ready to turn back for a long voyage as soon as the cold weather starts to cover the northern parts of the United States.
Technically, after consolidating at low levels in a cold weather season, natural gas seems to surprise the traders who are still sitting on shorts. I find an announcement of a fresh Pacific storm may push the price of natural gas futures more rapidly upward during the week of February 6th, 2017.
On analysis of the movement of natural gas futures price in different time zones, I find that the consolidation phase at the lower levels of this season seems to be over and a gap up opening is expected in the first trading session next week. Technically, the lower trading range of this season from $2.992 to $3.147 may be broken on the upper side at any time and then this consolidation zone will provide good support afterwards during this season. A series of gap-ups will be visible in the daily chart if any sudden announcement of an arctic blast flashes in February.
If this consolidation zone is broken on the lower end of $2.992, the situation will attract sellers and the final support may be seen at $2.888, which is also a great major psychological support level for the natural gas futures price traders and as well as the 200 DMA level in a daily chart. But the chances of a move towards such a lower level seem to be less. I find that the opening of natural gas futures price on the first trading session above $3.147 will not only attract bulls to create fresh buy positions but also result in short covering which will further push the prices more upward.
On analysis of the fundamentals of natural gas, I feel the stronger dollar and lack of announcement of cold weather are pushing the natural gas futures price downward. Though, I find the chances of going down below $3 level very rare. On analysis of the movement of natural gas futures price in 1 hour chart, I find the level of $3.557, though a strong resistive, but not impossible in the month of February 2017. And if the natural gas futures price successfully closes above $3.575, the possible height of the move will be 3.788 on the charts.
In my last analysis “Is Natural Gas Going To Test A Historical Repetition In 2017?”, I predicted the formation of a pre-peak pattern and define them in a weekly chart, the movement of the natural gas futures price is still under the range of peak zone, though at the lower but this is also a good strong supportive point and once it enters back inside the peak zone on February 6th, 2017, a rally in natural gas futures price may be seen well during the month of February 2017.
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.