Natural gas on the Nymex had a negative week before closing 6.8% lower than the previous one, at $2.58. EIA reported on Thursday a build of 84 Bcf in working underground stocks. Total inventory remains high for this time of the year at 2,795 Bcf, 15.7 % higher y/y, 26.5% above the 5-year average. Both percentages have been well in the descending for the last couple of months although stocks have remained above the 5-year maximum.

The July contract came under pressure in the early days of its higher trading volumes. This temporary negative momentum will give us the chance to hedge any previous buying positions from even lower re-buy area where new entry levels are occuring. This is a rather aggressive move so we need to proceed with caution. We believe that we are now seeing the seasonal uptrend coming into play. The previous resistance at $2.70 will have to offer the new support level, while getting well into summer contract trading in larger volumes. The market will eventually break-out in uptrend from there reaching higher highs. The $4.00 level has to be our direction for the next few months. The same ranges will give us multiple times the profit while buying any dip coming our way on the near-term charts.

We are going to keep in mind that this move has begun well below the $2.00 level two months ago, so it is important for any market participant not to become too greedy about this trading idea. Natural gas has received a lot of publicity since the start of Russia's invasion of Ukraine. I have explained many times that U.S. producers should be concerned with domestic demand, meeting electricity generation needs, rather than LNG exports, which, even in the distant future, will still be only a fraction of the total production or demand. In the media this is not explained enough.

U.S. macro data and the Dollar against majors have to be routinely monitored. Daily, 4hour, 15min MACD and RSI are pointing to entry areas.

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