Natural Gas Technical Analysis and Near-Term Outlook

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

Natural gas has entered a period of consolidation in recent weeks that will likely lead to an eventual break higher. Today, the prompt month October contract tested and held a key level at $2.30 on a closing basis. This sits just above the smaller than (0.618) target of the waves up from $1.991 and $2.021 and is in line with the $2.301 confirmation point of a $1.856 double bottom on the continuation chart. Another test of $2.30 is anticipated within the next couple of days. Settling above $2.30 will open the way for a push to challenge $2.39 and likely $2.46.

Nevertheless, resistance around $2.30 has been resilient for the past few days. The late pullback from today’s $2.325 high warns that natural gas will continue to consolidate as traders wait for more evidence of bullish fundamentals and sentiment. A simple test of support should hold the 38 percent retracement of the rise from $2.021 at $2.21. Falling below this will call for an attempt to take out key near-term support and the 62 percent retracement at $2.14. Settling below $2.14 would put the near-term odds in favor of testing the $2.08 smaller than (0.618) target of the wave down from $2.421.

Natural Gas Technical Analysis and Near-Term Outlook

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

October natural gas recaptured a bearish outlook for the near-term after settling below the 78 percent retracement of the rise from $1.991 and negating a potential inverse head and shoulders pattern. The 89 percent retracement at $2.04 has held though, and today’s long-legged doji warns that another test of resistance might take place before prices challenge $1.99 and lower.

The wave down from $2.425 calls for a test of its $1.99 equal to (1.00) target after prices settled below the $2.15 smaller than (0.618) target on Monday. Closing below $2.04 will significantly increase the odds for a test of $1.99, which is in line with the $1.991 contract low. Settling below $1.99 may be a challenge given its proximity to the psychologically important $2.00 level but would open the way for the $1.88 equal to target of the wave down from $3.648 to finally be fulfilled.

Nonetheless, support at $2.04 has been resilient for the past two days. Furthermore, today’s long-legged doji and the intra-day wave up from $2.021 suggest a test of $2.14 and even $2.18 might take place first. The $2.18 level is key resistance for the near-term because it is in line with the 38 percent retracement of the decline from $2.421. Settling above $2.14 would warn that the move down is failing and call for tests of $2.23 and a near-term bullish decision point at $2.28 that connects to $2.45 and higher.

Natural Gas Technical Analysis and Near-Term Outlook

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

A sustainable bullish reversal is likely underway for natural gas. Confirmed weekly bullish KasePO, RSI, and MACD divergence signals and a bullish weekly KCDpeak (oversold signal) call for a much more substantial test of resistance. Such a move will be confirmed by a close above the $2.30 neckline of an inverted head and shoulders pattern. The target of the inverted head and shoulders pattern is $2.72. This objective is also in line with the intermediate (1.382) target of the wave up from $1.882 and the 62 percent retracement of the decline from $3.193.

For the outlook in the coming days, closing above the $2.24 smaller than (0.618) target of the wave up from $2.097 will call for a test of this wave’s equal to (1.00) target, which is in line with the $2.30 neckline. Settling above $2.30 will open the way for a highly confluent $2.37 target that connects to $2.42 and higher.

That said, there is still potential for the right shoulder of the inverted head and shoulders pattern to extend. The wave down from $2.301 took out its $2.15 smaller than target today. This suggests that this wave will test its $2.07 equal to target before prices rise to challenge the $2.30 neckline. The $2.07 level is expected to hold. Closing below this will warn that the move up is failing and call for a test of key support at $2.04. The right shoulder would remain intact should $2.04 hold. Settling below this would negate the pattern and shift the odds in favor of natural gas falling to $2.00 and lower.

Natural Gas Technical Analysis and Near-Term Outlook

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

September natural gas continues to show signs of a bullish recovery. A weekly bullish KCDpeak (oversold signal) and weekly bullish KasePO, RSI, and MACD divergences suggest a bottom has been made. The 10-day DMI and daily Kase Trend indicators are also bullish. Furthermore, today’s move up shook off a series of bearish daily candlesticks that had formed during the past several days.

The move up is struggling to settle above the 89 percent retracement from $2.302 and equal to (1.00) target of the subwave up from $1.882 at $2.27. However, today’s rise has put natural gas in a position to re-challenge and overcome $2.27 within the next day or so. Closing above $2.27 will call for a minor target at $2.33 and then a test of the next major objective at $2.37. The $2.37 objective is in line with the intermediate (1.382) target of the subwave up from $1.882, the smaller than (0.618) target of the primary wave up from $1.882, and the 38 percent retracement of the decline from $3.193. Settling above $2.37 for a few days will provide more evidence that a sustainable bullish reversal is underway.

That said, natural gas bulls are not completely out of the woods yet. The resilience of $2.27 resistance and late pullback from $2.276 warns that another test of support might take place. Taking out $2.16 will call for a test of key near-term support at $2.13. This is the 38 percent retracement of the rise from $1.882. The $2.13 level is also in line with the $2.134 corrective swing low of the primary wave up from $1.882 which projects to $2.37 and higher. Closing below $2.13 will not confirm that the move up has failed but would call for $2.08 and then a test of a bearish decision point at $2.02.

Natural Gas Technical Analysis and Near-Term Outlook

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

Natural gas continued to rise as called for in Tuesday’s update and confirmed Friday’s morning star setup and Monday’s hammer. Daily bullish KaseCD, RSI, and Stochastic divergences were also confirmed. These patterns and signals call for a larger test of resistance and warn that a bullish reversal may be underway.

The move up is now poised to challenge a highly confluent and key target at $2.16. This objective is split around the XC (2.764) projection of the wave up from $1.882, the 62 percent retracement from $2.302, and the 21 percent retracement from $3.193. The $2.16 target also sits above the $2.149 swing high and is in line with the bullish threshold of the daily Kase Trend indicator. Settling above $2.16 might be a challenge without another test of support first but would open the way for $2.19, $2.24, and $2.28 in the coming days.

Nevertheless, the move up could still prove to be another simple correction. This is because the waves down from $3.570 and $2.302 still favor a test of $1.83. Should natural gas turn lower before overcoming $2.16 look for support at $2.07 and $2.03. Falling below $2.03 will call for a test of key near-term support at $1.97.

Natural Gas Technical Analysis and Near-Term Outlook

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

September natural gas retains a bearish outlook and is poised to challenge the psychologically important $2.00 level and likely a confluent $1.97 objective within the next day or so. The $1.97 objective is the XC (2.764) projection of the first wave down from $3.193, the smaller than (0.618) target of the wave down from $2.302, and the equal to (1.00) target of the most recent wave down from $2.149. This is another potential stalling point given its confluence and proximity to the $2.00 level. However, any move up from $1.97 will likely be a correction without a significant and lasting bullish shift in the underlying fundamentals.

Settling below $1.97 will open the way for $1.90 and eventually the next major objective at $1.83. The $1.83 objective is the equal to target of the waves down from $2.302 and $3.570. This objective is also near the continuation chart’s recent $1.856 swing low, which was in line with the 78 percent retracement of the rise from $1.481.

Should natural gas prices rise before taking out $2.00 look for initial resistance at $2.07 and then $2.12. The $2.12 level is the smaller than target of the current wave up from $1.991. Overcoming this would call for a test of the equal to target and key near-term resistance at $2.18. The $2.18 level is also the 62 percent retracement of the decline from $2.302, so settling above this would call for a more substantial test of resistance before the move down extends.

Natural Gas Technical Analysis and Near-Term Outlook

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

Natural gas rose to challenge the 21 percent retracement of the decline from $3.221 at $2.27 before stalling and pulling back for the past couple of days. The move down from $2.270 challenged but settled above the 62 percent retracement of the rise from $2.015 at $2.11 today.

This is a tight call for the near term because daily trend indicators remain bearish, the downtrend is intact, and the wave formation calls for a test of $1.97 and lower. However, daily bullish KaseCD and MACD divergences confirmed at the $2.015 swing low and the fact that $2.11 held on a closing basis warn that a larger test of resistance might still take place in the coming days.

Given the close above $2.11 was nominal, prices held the 38 percent retracement of the decline from $2.270 at $2.17, and natural gas is falling back toward $2.11 late this afternoon the near-term outlook leans bearish. A test of the $2.06 smaller than (0.618) target of the wave down from $2.270 is expected. Closing below this will call for a test of the $2.00 equal to (1.00) target and then the next major objective at $1.97.

That said, should prices rally again and overcome $2.17 look for a test of $2.21 and possibly key near-term resistance at $2.26. The $2.26 level is the smaller than target of the wave up from $2.015. Settling above $2.26 will call for natural gas to rise and test at least this wave’s $2.36 equal to target.

Natural Gas Technical Analysis and Near-Term Outlook

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

Natural gas has continued to decline toward the psychologically important $2.00 level as called for. Today’s decline reflects a resurgence in bearish sentiment. The $2.03 larger than (1.618) target of the wave down from $2.448 held, but the larger and more important waves down from $3.590 and $3.221 call for a continued decline.

Tomorrow, look for a test of the $2.00 target of a confirmed $3.21 double top and likely the $1.97 XC (2.764) projection of the first wave down from $3.221. This is also the smaller than target of the wave down from $3.027. The $1.97 objective is a potential stalling point. However, any move will likely be a correction because the wave down from $3.590 favors an eventual test of its $1.84 equal to (1.00) target.

The daily Stochastic has been oversold for a few weeks and the RSI entered oversold territory today. A test of resistance will probably take place soon, but no bullish patterns or confirmed signals call for such a move. Even so, should prices rise before taking out $2.00 look for initial resistance at today’s $2.11 midpoint. Overcoming this would call for a test of key near-term resistance at today’s $2.18 open.

Natural Gas Technical Analysis and Near-Term Outlook

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

August natural gas fell to test the $2.31 smaller than (0.618) target of the wave down from $2.448 as called for. This objective held, but most waves that meet the smaller than target extend to fulfill at least the equal to (1.00) target, in this case, $2.26. Therefore, the outlook for natural gas is bearish and a test of $2.26 is expected tomorrow. Closing below $2.26 will call for the $2.21 and $2.18 intermediate (1.382) and larger than (1.618) targets to be challenged in the coming days.

Because the $2.268 swing low held, the move up from that level might still prove to be a period of consolidation before a larger test of resistance takes place. Should natural gas overcome the 38 percent retracement from $2.448 at $2.35 early tomorrow look for a test of the $2.40 smaller than target of the wave up from $2.268. Overcoming this would call for key near-term resistance at $2.47 to be challenged. Settling above $2.47 would put the near-term odds in favor of testing $2.54 and $2.58.

Natural Gas Technical Analysis and Near-Term Outlook

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

August natural gas has settled below the psychologically important $2.50 level for the past few days after confirming a double top that formed around $3.21. The double top’s target is $2.00, but it is doubtful that prices will fall this low. Prices also challenged the $2.41 larger than (1.618) target of the primary wave down from $3.221 today. This is a potential stalling point and the move down is due for a correction. However, there are no bullish patterns or signals that call for the move down to stall. Prices are also trading below all major daily moving averages, daily momentum is declining, and daily trend indicators are bearish. Therefore, the outlook remains bearish.

Tomorrow, look for a test of the $2.37 smaller than (0.618) of the wave down from $3.590. This is also a potential stalling point, so even though there are no bullish patterns or signals, there is still a reasonable chance for a correction soon. Closing below $2.37 will open the way for $2.32 and lower in the coming days.

Should prices rise before taking out $2.41 look for initial resistance at $2.48. Closing above this would call for a test of $2.52 and possibly key near-term resistance at $2.590. Settling above $2.590 would call for an extended correction where the next major threshold is the 38 percent retracement from $3.221 at $2.72.