Low storage level (relative to historical norms) is making the price extremely susceptible to changes in the weather models. Instead of pushing the price higher gradually by 5-10 cents a week, bullish changes in the short-term weather models create fear, which results in double-digit rallies over the course of a single trading session, as happened on Monday, January 14.
The bullish changes in the weather models are resulting in an extremely exaggerated bullish change in natural gas prices. Prompt-month contract price can reach high levels and then correct sharply even if the weather turns only slightly bearish. In other words, prompt month contracts (February contract and, to a lesser degree, March contract) are very speculative and very risky to trade right now.
The best strategy in Ngas February and March contracts can be buying the dips at the strong support levels.
Looking at the NGAS February contracts, the price is testing the EMA 50 and Ichimoku Cloud support. We also see a bullish flag formation on the H4 Chart.