Natural Gas Faces Breakdown Risk With Key Support at $3.9117 Under Pressure

Analyzing the movements of the natural gas futures since I wrote my last analysis, I anticipate that the natural gas futures will likely start next week with a gap-down opening if they close this week below the significant support at $3.859.

Undoubtedly, changing weather patterns and technical formations still favor the bears to remain in command.

Technical Levels to Watch

In the weekly chart, natural gas futures are trying to hold immediate support at 200 DMA at $3.9117.

But, the formation of a bearish hammer looks evident enough to extend this weakness during the upcoming week if the natural gas futures close this week below this immediate support.

Undoubtedly, the natural gas futures could get significant support at 9 DMA at $3.728.

But a breakdown below this could result in the formation of the next confirmatory bearish candle to support the exhaustive candle, formed this week.

I anticipate that if the natural gas futures start the next week with a gap-down opening, the formation of such a bearish confirmatory candle is likely to complete.

Inversely, if the natural gas futures hold this week above the 200 DMA at $3.9117, some bouncing moves can be seen but the rallies will find tough resistances at $4.225 and $4.475.

In the daily chart, natural gas futures are teetering at a pivotal point at $3.922, after hitting the day’s high at $3.950. This indicates a breakdown move below the immediate support at $3.859.

Undoubtedly, a breakdown below this significant support could push the natural gas futures to test the next support at 20 DMA at $3.705.

Take Away for the Traders

I anticipate that any upward move by the natural gas futures will likely be a futile attempt by the bulls as the natural gas futures are trading much below the 9 DMA at $4.055 in the daily chart.

In case of a selling spree, natural gas futures could test the next significant support at the 20 DMA at $3.705 and the 50 DMA at $3.673.

Disclaimer: Readers are advised to take any position in natural gas futures at their own risk as this analysis is only based on the observations.