Natural Gas June futures contract continues consolidating within a narrow range: $1.68 - $1.76. A potential for a move higher is seen in the near-term.
UGAZ: Based on 1 Hr chart pattern and Chande Momentum indicator, an upside move can be expected within May 26 - 27 timeframe; $20 is seen as first upside target, $22-23 level as resistance, while $15.30 is seen as support. A break below could lead to $14 handle. Multiple consecutive green bars observed between May 22 and May 26 on UGAZ chart, are indicative of potential bottoming out. On Balance Volume (OBV) kept moving lower for both UGAZ and NG throughout May, approaching a potential bottom, with RSI momentum turning higher on 4 Hr chart. This could be a technical sign of reversal.
However, NG trading range is narrow with main support at $1.60 and main resistance at $2.0. This trading range may continue in the near-term. June contract settles on May 27th, with last position on May 28th. Higher priced July contract continues after that through June 26th (its settlement).
Demand is picking up, although gradually, and still under oversupplied conditions.
Based on fundamentals, the overall direction of NG futures is expected to go higher from here, with consolidation to continue into early June. NG forward curve as well as seasonal demand are both pointing toward higher prices.
A choppy pattern may continue until we get a forecast for a heat wave to kick off high cooling demand season.
UGAZ: Based on 1 Hr chart pattern and Chande Momentum indicator, an upside move can be expected within May 26 - 27 timeframe; $20 is seen as first upside target, $22-23 level as resistance, while $15.30 is seen as support. A break below could lead to $14 handle. Multiple consecutive green bars observed between May 22 and May 26 on UGAZ chart, are indicative of potential bottoming out. On Balance Volume (OBV) kept moving lower for both UGAZ and NG throughout May, approaching a potential bottom, with RSI momentum turning higher on 4 Hr chart. This could be a technical sign of reversal.
However, NG trading range is narrow with main support at $1.60 and main resistance at $2.0. This trading range may continue in the near-term. June contract settles on May 27th, with last position on May 28th. Higher priced July contract continues after that through June 26th (its settlement).
Demand is picking up, although gradually, and still under oversupplied conditions.
Based on fundamentals, the overall direction of NG futures is expected to go higher from here, with consolidation to continue into early June. NG forward curve as well as seasonal demand are both pointing toward higher prices.
A choppy pattern may continue until we get a forecast for a heat wave to kick off high cooling demand season.