

U.S. natural gas futures settled to $3.87/mmBtu, influenced by colder weather forecasts for late December and early January. There is a 169 Bcf withdrawal in the upcoming EIA report due to delayed data from the federal holiday, leading to a potential deficit compared to the five-year average for the first time since April. Although inventory shrinkage has been less than anticipated, the ongoing cold weather presents trading opportunities. The author plans to ride the current trend until late February before switching to short positions as temperatures rise in spring, using natural gas trading to enhance year-end returns.
Natural gas price has resumed past week on a negative note, rebounded from the support low of 314 and managed to close at 352. Natural gas price has surged by +6.25% in past week. Price has sustained over 200-DEMA level placed at 330.30, which will be crucial support for natural gas. Price has still remained in a rising channel and immediate resistance would be at 50-DEMA level, which would be at 366.40. Daily SAR is also placed on the opposite side at 366.50. If price breaks through this hurdle, we may expect further upside momentum in natural gas price where next hurdle would be at 390.
With recent price rebound, OI levels in the January contract have remained stable around 23,200 lots. The momentum indicator, RSI, remained around 45–50 levels on the daily as well as weekly chart. Also, we can observe a convergence on MACD below zero-line along with declining negative histograms, which collectively suggests a bullish bias in natural gas price.
We are expecting a sideways-to-bullish trend in natural gas price and traders may look for buy-on-dips opportunities in the upcoming week.
| Support 2 | Support 1 | CMP | Resistance 1 | Resistance 2 |
|---|---|---|---|---|
| 314 | 330.30 | 352 | 366.50 | 390 |
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