Analyzing the movements of the natural gas, I find that after finding support at $3.100 on May 20, 2025, natural gas futures bumped up to $3.512 on May 21 this week, and after facing stiff resistance tested the $3.340 before closing the day at $3.364, creating an exhaustive hammer yesterday.
Undoubtedly, natural gas futures remained extremely bearish, indicating a surge in bearish pressure as they have come out of the uptrend zone amid a steep slide that started on May 12, 2025, when they tested a high at $3.841 and pushed them below the significant resistance at the 200 DMA at $3.305.
I anticipate that natural gas futures will likely remain under bearish pressure due to the formation of two bearish crossovers by the 50 DMA has moved below the 100 DMA, and the 9 DMA will pierce the 20 DMA shortly in the daily chart.
Secondly, natural gas futures are currently at a pivotal point just above the 200 DMA and are likely to move below this significant support to form a confirmatory candle after yesterday’s bearish hammer amid growing concern over the lesser demand in the short term.
According to natgasweather.com reports, weather systems will track across the Midwest and eastern half of the U.S. with showers, thunderstorms, and highs of 50s-70s, locally 40s. The western and southern U.S. will be warm to hot as strong upper high pressure sets up with highs of 70s-90s, besides hotter 100s inland California to the Southwest deserts.
This weather pattern indicates that the overall national demand will be light for the next 7 days from May 21-27.
Technical Levels to Watch
In the daily chart, natural gas futures are trading below the 20 DMA at $3.434 when the 9 DMA has tilted down to move below the 20 DMA in today’s session which is likely to push the natural gas futures below the significant support at 200 DMA at $3.305 to form a confirmatory candle in support of the exhaustive candle, formed yesterday.
Inversely, any bounce by the natural gas futures will attract big bears to load fresh shorts above the significant resistance at $3.512 with a stop loss at $3.710 for a target at $2.847.
Disclaimer: Readers are advised to take any position in natural gas futures at their own risk, as this analysis is based only on observations.