Natural Gas Technical Analysis and Near-Term Outlook

Natural gas overcame the $3.045 intra-day swing high today. This invalidated the prior primary wave down from $3.204 that had fulfilled its smaller than (0.618) at the $2.903 swing low. This is bullish for the near-term outlook and suggests that natural gas will now rise to challenge $3.09. This is the 62 percent retracement of the decline from $3.204. Closing above this would strongly imply that the corrective move down is complete and clear the way for a test of $3.15 and possibly $3.20.

With that said, the $3.045 swing high was only marginally overcome and there is now a new primary wave down from $3.204 that projects to $2.86 as the smaller than (0.618) target. Additionally, the move up from $2.903 lacks a meaningful primary wave. Therefore, there is still a reasonable chance of a deeper test of support or for prices to settle into a period of consolidation. Should natural gas take out $2.99 early tomorrow look for a test of $2.96, which, based on current technical factors is expected to hold. Key near-term support is $2.90, a close below which would call for a test of $2.86.

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 Technical Analysis and Near-Term Outlook

Natural gas continued to decline as expected today and settled back below $3.00 and the bottom of Monday’s gap. The pullback indicates that Monday’s rally to $3.15 was too much too soon. At this point, it looks as though natural gas will settle back into a trading range. The danger is that because of Monday’s failed rally, and due to confirmed bearish reversal patterns and signals, the pullback could overextend before finding a bottom.

With that said, given current technical factors, near-term odds favor a test of $2.92, a close below which will call for $2.88 and possibly $2.84. There is currently no strong evidence to call for a move below $2.84. However, closing below $2.84 would imply that the move down will likely extend to $2.76 and possibly lower before settling back into a trading range.

Nevertheless, the decline from $3.15 lacks a clear wave structure, and the move up from $2.94 at the end of today indicates a test of $3.02 might take place first. This level is expected to hold. Overcoming $3.02 would call for $3.07 and possibly $3.11. Settling above $3.07 would imply the pullback is complete. Closing above $3.11 would shift near-term odds back in favor of a continued rise to $3.17 and higher.

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 Technical Analysis and Near-Term Outlook

Natural gas has been trading in a very indecisive manner for the past few weeks. A complex head and shoulders pattern has taken shape and would be confirmed by a close below $2.88. However, this pattern looks as though it will fail because the right side of the head and shoulders forms a bullish expanding wedge. June natural gas is challenging the upper trend line of this pattern this afternoon. Moreover, the small intraday wave up from $2.881 met its smaller than (0.618) target this afternoon and is now poised to reach $3.02. This is the most confluent target on the chart, so $3.02 could prove to be another stalling point. However, closing above $3.02 will clear the way for $3.07 and likely $3.13.

Nevertheless, the top of the right shoulder of the head and shoulders pattern at $2.989 has held as of this analysis (marginally). Should June natural gas take out $2.95 early tomorrow look for a test of $2.91, which then connects to $2.86. Closing below $2.86 would also take out the $2.88 neckline of the head and shoulders and shift near-term odds in favor of a deeper test of support.

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 Technical Analysis and Near-Term Outlook

The outlook for natural gas remains bullish because the move up from $2.521 looks to be forming a five-wave pattern that targets at least $3.03 and possibly $3.13. However, the move up is showing signs of exhaustion as it tries to overcome $3.00. This includes the potential formation of an ending diagonal pattern for Wave V. Even so, a move above $2.99 will call for $3.03 to be challenged. This is a highly confluent wave projection and retracement. Therefore, natural gas will likely be hard-pressed to settle above $3.03 without another test of support first. An eventual close above $3.03 would call for $3.08 and likely $3.13.

That said, momentum oscillators are waning and the bearish daily candlestick patterns, including a bearish engulfing line today, suggest a test of $2.90 and possibly $2.86 might take place first. Support at $2.86 is expected to hold. However, taking out $2.86 will call key support at $2.83 to be challenged. Settling below $2.83 remains doubtful but would reflect a bearish shift in supply and demand and near-term sentiment.

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 Technical Analysis and Near-Term Outlook

Natural gas has taken on a more bullish outlook during the past week. The primary subwave up from $2.534 settled above its $2.92 smaller than (0.618) target and favors a test of its $3.03 equal to (1.00) target. The move up is beginning to look exhausted though, so settling above $3.03 will likely be a challenge during the next few days. Even so, this would clear the way for $3.03 and possibly $3.13, which is the highest that the primary wave up from $2.521 projects.

With that said, the move up has stalled just below the psychologically important $3.00 level at $2.988 and formed a bearish shooting star today. Therefore, there is a good chance for a test of $2.91 first. This is Tuesday’s midpoint and the completion point of the shooting star. Closing below $2.91 will call for a test of the shooting star’s $2.87 confirmation point. Confirming the shooting star would call for a deeper test of support before rising to challenge targets around $3.00 again.

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 Technical Analysis and Near-Term Outlook

Natural gas retains a firm bearish outlook even after today’s somewhat surprising bounce. The move up stalled near the 38 percent retracement of the decline from $2.688 and could not overcome the $2.568 intra-day swing high. This suggests the move up is another correction after breaking lower out of the bearish flag pattern Monday. The move down is poised to challenge $2.46 again, a close below which will call for the next major objective and a potential stalling point at $2.40. Nevertheless, as stated in yesterday’s daily update, an eventual close below $2.40 is expected, which will clear the way for $2.33 and lower.

With that said, today’s move up dampens near-term odds for a continued decline during the next few days. Moreover, should natural gas overcome today’s $2.546 high early tomorrow look for a test of $2.59. This has become a highly confluent resistance level and is in line with the breakout point of the flag. It is common to see a pullback to challenge the breakout point of this type of pattern. Closing above $2.59 is doubtful, but such a move would reflect a bullish shift in near-term sentiment and call for $2.64 and possibly a move back toward crucial upper resistance at $2.69 again.

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 Technical Analysis and Near-Term Outlook

Natural gas retains a bearish outlook. The move up from $2.459 tested and held $2.69 resistance, which has helped to shape a bearish flag. This is a continuation pattern that is expected to break lower. The bottom trend line around $2.57 held today, but a close below this will confirm a break lower out of the flag and clear the way for $2.51. This then connects to $2.45 and lower.

Nevertheless, because $2.57 held today, there is a modest chance for another oscillation within the flag to test the upper trend line again. This is doubtful but a move above $2.65 will call for a test of $2.69 again. Settling above $2.69 would call for $2.73 and possibly $2.76, which would likely be in line with the flag’s upper trend line by the time prices rose that high.

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 Technical Analysis and Near-Term Outlook

Not a lot changed for natural gas today. The move down is hesitant to definitively take out $2.50. However, the waves and subwaves down from $3.06 still favor a continued decline to $2.40 and possibly $2.30. Taking out $2.50 will clear the way for $2.45 and then $2.40 during the next few days.

With that said, $2.50 is in line with the 50 percent retracement of the rise from $2.422 and held on a closing basis today. Also, today’s doji dampens near-term odds for a continued decline. Should natural gas overcome $2.56 early tomorrow look for a test of key near-term resistance at $2.61. Settling above $2.61 will call for a larger correction to challenge $2.67 before the decline continues as expected.

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 Technical Analysis and Near-Term Outlook

The long-term outlook for natural gas is bearish. However, the move down is struggling to definitively take out major support around $2.52. Monday’s close below $2.52 was negative and implies that prices will eventually fall to $2.39 and possibly $2.30.

Nevertheless, $2.52 has been held on a closing basis for the past two days, and the newly formed wave up from $2.478 met its $2.54 smaller than (0.618) target this afternoon. Therefore, it looks as though natural gas will try to rise to $2.59 first. This will fill Monday’s gap down, fulfill the equal to (1.00) target of the wave up from $2.478, and test the 21 percent retracement of the decline from $3.06.

Closing above $2.59 is unlikely but would call for $2.63 and possibly $2.70. The $2.70 level is most important because it is the 38 percent retracement of the decline from $3.06 and the 200-day moving average. Settling above $2.70 is highly doubtful without a surprise bullish shift in external factors (e.g., weather, storage, etc.).

Once $2.59 is met another test of support is anticipated. Moreover, a close below $2.49 before or after $2.59 is challenged will clear the way for $2.44 and then the next major thresholds at $2.39 and $2.30.

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.