On analysis of the movements of the natural gas futures, since I wrote my last analysis on March 12, 2025, I anticipate that the bears remain aggressive with growing hopes for swelling stockpiles with lesser demand.
Natural gas futures dropped about 6% this Thursday due to storage buildup and less demand next week due to wintery conditions in North America. The U.S. natural gas reserves are significantly lower than normal at this time of the year.
However, technical formations look evident enough to provide sufficient reasons for the thick presence of big bears at the current levels, as recent weather reports support the presence of normal weather with emerging spring conditions.
Technical Levels to Watch
In the daily chart, natural gas futures are just teetering at the 50 DMA at $3.870 after a gap-down opening on Friday that indicates that a breakdown below this significant support is likely to ignite fresh selling next week due to the formation of a bearish crossover by 9 DMA and 20 DMA.
Inversely, if the natural gas futures sustain above the significant support at 50 DMA till today’s closing, a technical bounce can be expected at next week’s opening that can provide a good opportunity to take a short position above the significant resistance at $4.212 with a stop loss at $4.369.
On the other hand, if natural gas futures close this week below the 50 DMA, next week is likely to start with a gap-down, and the futures could try to test the next support at the 100 DMA at $3.558.
Undoubtedly, a breakdown below the next significant support at 100 DMA could push the natural gas futures to test the major support at 200 DMA at $3.078 during the upcoming week.
In the weekly chart, natural gas futures are trading below the 200 DMA at $3.929 and are trying to defend the immediate support at 9 DMA at $3.843 indicating a surge in bearish pressure that may ignite a fresh selling spree if the natural gas futures close this week below the 9 DMA.
Undoubtedly, a bullish formation by the 50 DMA and 100 DMA could result in some wobbly moves but the overall trend will remain bearish, as this year will mark a major shift in the gas cycle, driven by a substantial increase in supply capacity and a more dynamic demand.
But, the current situation indicates a steep slide is likely during the upcoming week until supply disruptions continue to exist this year.
Disclaimer: Readers are requested to take any position in natural gas futures at their own risk as this analysis is only based on the observations.