Okay, maybe not fast. But it certainly is moving differently than it has been. After falling about 80% from its highs from August to March, natural gas futures have been taking the first step to reverse their trend…stop going down. ⏸️
Below is a daily chart of natural gas futures trading in a $2.00 to $2.65 range for the last five months. But this week, traders are putting it back on their radar due to its strength relative to the rest of the energy commodity complex. With crude oil, gasoline, and heating oil all falling several percent this week, natural gas’s nearly 5% gain certainly stands out. 🤔
And from a long-term perspective, some investors and traders see the current area as an interesting one. The daily chart below shows prices stabilized above the $2.00 level that’s acted as an important support and resistance level over the last few years. For the non-technical analysts in the room, that simply means an area where there’s been a significant shift in supply and demand. 🧭
Earlier in the year, there was a lot of activity in natural gas on the short side. Inverse and leveraged ETFs were regularly trending on our streams as traders played the trend to the downside. But so far…there hasn’t been much activity as prices have started to move higher. 🔈
That lack of interest is catching traders’ attention, who believe this week’s rally is the beginning of a new uptrend. Time will tell, as always. But we figured we’d point it out as an interesting, under-the-radar development in the volatile natural gas market. 👀