Natural Gas Downside Ahead

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Natural Gas Downside Ahead

Natural Gas - More Downside Ahead

It seems more downside is ahead for Natural Gas, the bearish pressure remains aggressive. Looking ahead, the demand will remain low while the stock keeps on growing.

All of this led to around 6% decline in Natural Gas in a single trading day. This move was driven by less demand and a build-up of the storage due to the upcoming wintery conditions. All of this doesn't paint a very good picture for the Natural Gas.

Bearish Technical Formation In Natural Gas

At the same time, bearish technical formations are appearing on the horizon. In addition, big bears are lurking around at the current levels, while the reports show that the weather will remain normal in the coming months.

On the D1 chart, the natural gas futures are trading near the 50 SMA, above the $3.50 support. Also, the SMA lines show that the selling will continue during the next few weeks.

But if natural gas can stay above the 50 SMA on the D1 chart, we can expect a technical bounce. This could push Natural gas beyond $4.20 with eyes set on $4.50.

Another scenario is that Natural Gas closes the week under the 50 DMA. In that case, the Natural Gas will start to move lower towards $3.50 and then $3.00.

The weekly chart of the Natural Gas shows that the 200 DMA is near the $4.00 handle. So, there's a good chance that bulls will not be able to pierce that level easily.

However, the bigger picture is that a steep slide is on the cards for Natural Gas. As long as the current supply & demand situation exists, the path of least resistance for Natural Gas is downside.

Also, we are far away from the winter months when the Natural Gas demand rises, pushing the prices higher as well. With no major weather changes and a higher supply, Natural Gas is likely to decline during Q2 and even Q3 2025.

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