Natural gas prices under pressure as bearish signals dominate market trends
Natural gas prices reverse rally, key levels in focus
Natural gas prices witnessed a sharp decline recently, reversing the bullish rally that briefly pushed the commodity to a high of $4.030. The reversal saw prices plummet to $3.310, where strong selling pressure forced the market to recalibrate. Analysts expect bearish sentiment to persist, driven by technical barriers and broader market dynamics.
Short-term market sentiment will likely hinge on breaking the $3.570 barrier or falling below $3.31, which could dictate future price direction.
Natural gas price dynamics (Nov 2024 - Dec 2024) Source: TradingView.
Technical levels reinforce bearish outlook
The $3.570 mark now serves as a significant resistance level, stalling any recovery attempts. Stochastic indicators also point to negative momentum, with the next immediate target set at $3.190. Analysts suggest that breaking this level could extend losses to $3.100 and possibly test key support near $3.960.
Conversely, the 4-hour chart paints a cautiously bullish picture, with an upward channel supporting recent momentum. The 50-day EMA at $3.31 provides immediate support, with the first resistance level at $3.61. A break above this threshold could see prices testing $3.83, while a failure to sustain momentum might lead to deeper declines toward $3.16 and $3.00. The 200-day EMA at $3.06 marks critical longer-term support.
The bearish trend for natural gas suggests limited upside potential unless key resistance levels are breached. Traders are advised to monitor these levels closely, along with stochastic momentum and EMA signals, to gauge market sentiment.
In our prior analysis, we highlighted the impact of bullish patterns driving prices above $3.60, fueled by cold weather and supply concerns. These factors remain critical to the natural gas market's trajectory.
