Technical Analysis: Natural Gas Futures (NG) – Daily Chart (as of June 27, 2025)

Natural Gas futures (NG) had a dynamic week, showing some significant upward moves on Friday, June 27, 2025. The August Nymex natural gas (NGQ25) closed sharply higher by over 6% on Friday, around $3.739 per MMBtu.

Overall Trend and Price Action:

• NG has seen a strong bullish surge recently, particularly on Friday, driven by anticipation of hotter US weather.
• This latest move confirmed a bullish continuation after testing support bases at 50 day SMA level.
• In the medium term, there’s been a significant recovery. Earlier in April, some analysts noted NG transitioning from a long bear market into a new upcycle, with a “Golden Cross” (50 > 200 DMA) occurring in October 2024, indicating a long-term bullish signal — but there is nothing called “long term bullish” in NG as new supply keeps coming as prices go up.

Key Levels (Support & Resistance):

• Immediate Resistance/Target: Price is approaching or testing a significant resistance zone. Some forecasts indicated initial extra target at $3.90 or $4.00.
• Immediate Support:
  • The price ended yesterday’s trading by testing a support base near $3.470, before rebounding strongly.
  • Further support noted around $3.580 (moving average 55) which held stability, and $3.610.
• Stronger Support: A “key support” level was mentioned around $3.00-$3.20 earlier, which, if tested and held, would further confirm the bullish reversal.

Moving Averages:

• The overall picture for moving averages is strongly bullish.
• All short-term and medium-term moving averages (MA5, MA10, MA20, MA50) are generally showing a “Buy” signal, with the current price well above them.
• The 200-day moving average, while potentially acting as resistance in some contexts, is less relevant for the current strong short-term bullish move, and the “Golden Cross” earlier indicates long-term support.

Technical Indicators:

• RSI (Relative Strength Index): The 14-day RSI is around 77.566 (as of June 27), indicating significantly overbought conditions. This suggests the rally has been very strong, and while momentum is high, a pullback or consolidation cannot be ruled out.
• Stochastics (9,6): Around 85.264 or 100 (StochRSI), also firmly in overbought territory, confirming the strong buying pressure.
• MACD (Moving Average Convergence Divergence): Showing a “Buy” signal (e.g., 0.045 as of June 27), confirming the bullish momentum.
• ADX (Average Directional Index): Around 84.323, indicating an “Overbought” condition and a very strong trend.

Chart Patterns (Based on textual descriptions):

• The price action on Friday, surging higher after a larger-than-expected build in weekly EIA inventories (which would normally be bearish), suggests that weather forecasts for hotter US weather are currently overriding fundamental supply data. This kind of “weather-driven” rally is typical for natural gas.
• Earlier, patterns like a “Triangle + falling wedge breakout” were mentioned as bottoming structures.

Outlook and Key Considerations:

• Weather Forecasts: Short-term natural gas prices are extremely sensitive to weather. Hotter-than-normal summer forecasts for key demand regions will continue to be a primary driver for upside.
• Storage Levels: EIA storage reports will remain crucial. While Friday saw a price surge despite a build, persistent large builds could eventually weigh on prices.
• Long-Term Trend Confirmation: The presence of a “Golden Cross” and the strong bullish signals from indicators suggest that NG might be in the early stages of a longer-term bullish cycle, following a multi-year bottom.
• Risk of Pullback: Given the severely overbought conditions (RSI, Stochastics, ADX), there is a significant risk of a healthy pullback or consolidation. However, strong trends can remain overbought for extended periods.

Summary: Natural Gas (NG) futures have shown a powerful surge, driven by weather expectations, and are firmly in a bullish trend. While short-term overbought conditions exist, the underlying bullish momentum appears strong, making the impact of upcoming weather and storage reports paramount.