Natural Gas Ready to Explode?

In recent months, Natural Gas (NG1!) has shown significant volatility, but now there are clear signals suggesting a major directional move could be imminent.

On the weekly technical chart, price has bounced from a strong demand zone between 2.50 and 2.70 USD/MMBtu, an area historically defended by institutional players. Currently, it is trading above 3.30 USD, consolidating in preparation for the next move. Key resistance zones to watch are between 3.90 and 4.20 USD, a region of high volume confluence and institutional supply.

Retail sentiment is extremely interesting: over 75% of retail traders are currently long. Historically, an excess of retail longs often leads to either corrections or accumulation/distribution phases, as large players tend to act against the majority.

Looking at the COT Report, the data supports the bullish thesis: non-commercials (speculative funds) remain net short, while commercials (physical operators) are increasing their long positions, indicating expectations of higher real demand in the medium term. This is a historically bullish signal, although it may not materialize immediately: commercials often start accumulating well before price movements occur.

Finally, seasonality favors the bulls: historically, from late April through mid-June, Natural Gas tends to perform positively, fueled by storage accumulation ahead of summer and the following winter season.

Strategically, a consolidation phase above 2.90–3.00 USD could serve as a base for larger moves towards 3.90 and eventually 4.90 USD, with the bullish scenario invalidated only below the 2.80 USD area.