Natural Gas: A Wild Price Swing Is in the Offing
NG
-8.73%
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The natural gas futures have moved as I predicted for the opening session of this week in my last analysis.
Friday witnessed frigid cold and blowing winds that knocked out power and cut energy production across the United States.
Despite a gap-up opening, the natural gas futures are facing selling pressure as the demand and supply could favor the bears as weather patterns are set to change after Dec. 28, 2022.
Winter Storm Elliott brought sub-freezing temperatures and extreme weather alerts to about two-thirds of the United States.
I believe that cold and snow in some areas could linger through the Christmas holidays and result in a steep reversal if the prices try to retest the base at $4.811 in today’s trading session.
Natural Gas Futures Daily Chart
In the daily chart, the natural gas futures have immediate support at $4.913, confirming that the current reversal from this level could shortly result in a wild price swing as the price is still above the weekly opening gap.
I believe that despite visible weakness, a sudden wild price swing is likely if the prices sustain above the immediate resistance at $5.185. A breakout above the second resistance at $5.259 is likely as well.
On the lower side, only a sustainable move below the significant support at $4.778 could push the prices into negative territory.
On the other hand, a breakout above the significant resistance at $5.574 will confirm a bullish uptrend during this week which may continue during the first week of January 2023.
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