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Natural Gas: New Lows Spook Bulls


Movements by natural gas futures since Apr. 14, 2023, while hitting a new low at $1.945, indicate a tilt in the waking habit of the natural gas bulls.

This looks evident enough to show a similarity with the beginning of fresh buying sprees soon after the bell rings at 8 a.m. in the U.S.

This regularity might be a coincident or a deliberately chosen time between 08:00 – 10:00 a.m. by a particular Hedge fund that decides its moves at this point.

However, this has pushed the prices approx. 16.87% at 08:30 on Apr. 18, 2023, from the low tested on Apr. 14, while I have been writing this article, despite some selling pressure.

I pointed out this expected reversal well in advance when I wrote my article on Apr. 14, while the traders were skeptical about any inflection in bearish sentiments.

Bears were in full swing amid favorable news flow on the weather front and supply issue. But the sentiments took a U-turn with changing news flow about the expected surge in cooling demand and the expected production disruption, as I mentioned in my last article.

Undoubtedly, if the bulls continue their timely wake-up, the futures could hit $2.796 after this week’s inventory as the buying is visible on every downward move, as price swings are likely to keep the traders indecisive up to the advent of a short-covering rally.

At this crucial point in time, the best strategy could be to short one lot of May 23 in case of a steep upward move above $3.767 and buy one lot of Jul. 23 in case of a steep fall below $2.2 and 1 lot at sub-$2 levels. Undoubtedly, this strategy might be risky as the buying in Jul. 23 futures looks to favor this strategy with a vigil eye on the news flow.
Natural Gas Futures 15 Minutes Chart

Technically, in the 15-Minute chart, futures look ready to hit the next target at $3.6, as buying support has shifted from $2.188 to $2.288, and is holding above the 200 DMA at $2.198.

Natural Gas Futures 1 Hr. Chart

In the 1-hr. chart, movements by natural gas futures look quite supportive as the hourly candles still look bullish above the 200 DMA, which could push futures above the immediate resistance of $2.348.




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