Natural Gas Futures (NG) Technical Analysis – Trade Through $3.202 Could Trigger Break into $3.125 to $3.057

Natural Gas futures finished higher last week with the market mostly underpinned by a shift in the weather forecast that called colder than average temperatures over the near-term. Ahead of the week-end, there was still some uncertainty over the forecast with many traders hoping for consistency in the estimates this week. The market also settled inside the previous week’s range which suggests investor indecision and impending volatility.

At 0534 GMT, December Natural Gas futures are trading $3.257, down $0.052 or -1.57%.

Weekly Swing Chart Technical Analysis

The main trend is up according to the weekly swing chart. A trade through $3.409 will signal a resumption of the uptrend. The main trend will change to down on a trade through $2.840.

The short-term range is $2.840 to $3.409. A near-term sell-off could drive the market into its retracement zone at $3.125 to $3.057. Since the main trend is up, buyers are likely to show up on a test of this zone.

Weekly Swing Chart Technical Forecast

Given last week’s inside move and what it represents, the direction of the December Natural Gas futures market this week is likely to be determined by trader reaction to $3.409 and $3.202.

Taking out $3.409 and sustaining the move will indicate the presence of buyers. If this move creates enough upside momentum then we could see an eventual test of the next main top at $3.683.

Taking out $3.202 will signal the presence of sellers. If this generates enough downside momentum then look for the selling to extend into the short-term retracement zone at $3.125 to $3.057. Look for buyers on the first test of this zone since the main trend is up.

Look for a potential acceleration to the downside if $3.057 fails as support.