NG selloff targets $4.400 ahead of reaching local high

Powerful upward momentum is now driving the US natural gas (NG) market. February futures hit $5.132 on January 22, extending gains from January 20. Over the past two trading sessions, the price has skyrocketed by more than 57%, rallying from $3.2 to a six-week high.

The technical setup confirms that the current upside is strong—even suggesting it is extreme. Quotes settled firmly above the upper Bollinger Band—a classic sign of overbought conditions and a deviation from average figures that often precedes either consolidation or correction. The Chaikin Oscillator is flying near record highs, signaling massive capital inflows. Such peaks typically coincide with local price tops.

Meanwhile, the Stochastic Oscillator (%K=63, %D=57) is in neutral territory but above the 50 threshold, suggesting a steady uptick with no trace of overbought conditions. A bullish crossover was recorded on January 16. Although quotes have been rising since then, the critical zone around 80 remains well away, meaning that current levels may hold for a while before correcting.

Fundamental factors stand by the present rally. Weather forecasts indicate a large-scale influx of Arctic air into the US mainland between January 24 and January 27. This is expected to ramp up heating demand, which may hit record figures, according to LSEG experts. At the same time, water in wells and pipelines is likely to freeze, especially in Texas and the Appalachians. This has already caused production to drop to a three-month low. The combination of these factors—rising demand and falling supply—is a perfect environment for NG prices to strengthen.

Consider the trading strategy presented below:

Lock in profits at current levels, with a corresponding order set at $4.400. Place Stop loss at $5.300.

This forecast is valid between January 22 and January 29, 2026.