Henry Hub Natural Gas – weather shapes demand

price histogram : total volume & delta
tf histogram : total volume & delta

For almost a month, the price of Henry Hub Natural Gas futures has not moved out of the 5.8 to 6.4 range. The expected price rallied in November and then a correction that no one expected until 5.4.

In three days, buyers happily bought all they could in the 5.3 to 5.8 range. This level is the range of key support. The starting point for this trend has been the volume array, which has been trading for nearly a month since the 20s of October.

Buyers dominated from Monday of last week until the current day, which reflected in the price surging to 7. Demand is influenced by several obvious factors – the tense geopolitical situation, COVID 2023 and weather conditions. By combining these factors, corporates are able to manipulate the price proficiently.

Monday opened with a gap – not often such an event can be seen in the market, considering percentage of algorithmic trading.

The second support level was formed on Thursday-Friday.
Important resistance levels are also marked on the slide.

The expected scenario is for the gap range to close and if nothing changes in the above 3 factors before then, demand will be the main agenda at the opening of the exchanges.

Note: all resistance and support levels are determined using volumetric analysis tools. The support range contains the most volumetric buying activity and the resistance range contains the most volume activity for the sellers.

Author & trader: Mikhail Lemah