Natural Gas Technical Analysis and Near-Term Outlook

Natural gas continues to struggle to take out $2.62 and test the 62 percent retracement of the rise from $2.308 at $2.60. However, because the primary wave down from $3.06 has taken out its $2.66 smaller than (0.618) target, odds still favor an eventual decline to the $2.53 equal to (1.00) target. Falling below $2.65 before prices rise much higher will clear the way for a test of $2.60 and then $2.52 in the coming days.

With that said, today’s move up from $2.615 has challenged first resistance around $2.70, and there is a good chance for a test of $2.74 and even $2.79 tomorrow. Resistance at $2.74 is in line with the 10-, 50-, and 100-day moving averages and could prove to be a stalling point for the upward correction. However, $2.79 is more important. This is the 38 percent retracement of the decline from $3.06 and must hold for the near-term outlook to remain bearish.

Settling above $2.79 would not mean the move down is over. However, this would call for a test of $2.84 and possibly $2.89. The $2.89 level is the 62 percent retracement of the decline from $3.06 and is in line with the $2.887 swing high. Overcoming this would invalidate the primary wave down from $3.06 that projects to $2.53. Closing above $2.89 is currently doubtful but would reflect a bullish shift in external factors and call for a push toward $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 briefly rose above the $2.88 target but stalled at $2.887. The subsequent move down has taken out Tuesday’s midpoint and is poised to challenge $2.77. This is the 62 percent retracement of the rise from $2.697. Closing below $2.77 will strongly imply that the corrective move up from $2.697 is complete. Settling below $2.72 will confirm this and clear the way for the next major target at $2.68.

Nevertheless, should natural gas rally above $2.86 early tomorrow look for another attempt at $2.92. This level is still expected to hold. Closing above $2.92 will shift near-term odds in favor of challenging $2.99 and possibly $3.04 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 fell again today as expected and settled below the $2.80 target called for in Tuesday’s update and the 20-day moving average. The decline from $3.06 is now poised to test a crucial target at $2.76. This is the larger than (1.618) target of the primary wave down from $3.06 and is split between the 38 percent retracement of the rise from $2.308 and the 100-day moving average. This might prove to be stingy near-term support, especially in the case that tomorrow’s reported withdrawal is larger than expected. Nevertheless, the charts can only tell us what the market currently knows about itself. Based on this week’s decline, it looks as though the market is shaking off last week’s cold snap. Therefore, upon a close below $2.77 look for $2.69 and $2.60.

That said, caution is still warranted because a miss in either direction by consensus expectations for tomorrow’s storage report could quickly drive prices much higher or lower. At this point, there is probably more upside risk than downside too. Therefore, should natural gas overcome $2.89 look for a test of key near-term resistance at $2.96. Closing above this would reflect renewed bullish sentiment and warn that the move down might be complete. Closing above $3.03 would confirm this and clear the way for $3.08 and higher. Keep in mind that April’s primary wave up from the $2.07 contract low still favors an eventual rise to fulfill its $3.29 equal to (1.00) target, which is also the larger than target of the initial wave up from $2.308.

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 rose as expected again today and has nearly fulfilled a crucial target and bullish decision point at $3.34. This is the larger than (1.618) target of the primary wave up from $2.268. It is also in line with the target of a rectangle pattern that prices broke higher out of yesterday. Normally, a pullback would be expected before overcoming the larger than target of such an important wave. However, external factors are quite extraordinary right now, so it would not be surprising to see prices overcome $3.34 during the next few days.

A sustained close above $3.34 will clear the way for $3.39, $3.45, and $3.55. However, it is important to note that given continue bullish sentiment from external factors (e.g., weather), there is potential for prices to rise to $3.99 and even $4.43. It is premature to call for such a move, but these are the XC (2.764) and trend terminus of the primary wave up from $2.268, respectively.

The daily RSI and Stochastic are overbought but can remain that way for an extended period during random events. Otherwise, there are no patterns or setups that call for the move up to stall other than the importance of resistance at $3.34. Even so, should natural gas take out $3.16 early tomorrow look for a test of key near-term support at $3.10. Settling below this would reflect a bearish shift in near-term sentiment and call for a test of $3.01 and possibly lower.

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 briefly fell below $2.77 support before rallying above the 62 percent retracement of the decline from $3.057. The move up is poised to challenge the crucial $2.99 objective again early tomorrow. Based on today’s rise, odds favor a move above $2.99 and a test of $3.06. Settling above $3.06 will clear the way for $3.13 and likely $3.20 in the coming days.

There is little technical evidence that suggests the move up will stall again at $2.99. Even so, this has been a resilient threshold. Should $2.99 hold and prices begin to pullback again look for support at $2.89 and $2.83. Falling below $2.83 would imply that a head and shoulders pattern has formed. It is doubtful that this pattern will take shape, but such a move would reflect a bearish shift in external factors (e.g., weather) and sentiment. Closing below $2.78, the smaller than (0.618) target of the newly formed wave down from $3.057, would call for the $2.73 neckline of the head and shoulders to be broken and for prices to fall toward $2.65 and likely lower.

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 fell as called for and settled just below Monday’s $2.79 midpoint. This completed yesterday’s shooting star and calls for a deeper test of support. Tomorrow, look for the evening star’s $2.73 confirmation point to be challenged. Additionally, the waves and subwaves down from $3.005 favor a decline to $2.69. For the move up to retain a reasonable chance of extending again during the next few days, $2.69 must hold. Closing below this will call for $2.63 and possibly $2.56, the lower of which is an area where Monday’s gap up would be filled.

That said, the late move down from $2.839 held the $2.748 swing low and formed a small up wave. Should natural gas overcome $2.82 in early trading tomorrow look for a test of this wave’s $2.85 equal to (1.00) target. This is also the 38 percent retracement of the decline from $3.005. Rising above $2.85 will call for $2.91, the larger than (1.618) target and 62 percent retracement. Settling above $2.91 would dampen odds for a deeper test of support and call for $2.99, the barrier to a renewed bullish 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 Technical Analysis and Near-Term Outlook

The near-term outlook for natural gas is bullish after meeting the smaller than (0.618) target of the primary wave up from $2.425 and settling above the 62 percent retracement of the decline from $2.835 and the 50-day moving average. Closing above $2.74 will call for a test of $2.78, the smaller than (0.618) target of the primary wave up from $2.268. This is also the barrier to a more bullish outlook during the next few weeks.

With that said, overcoming $2.78 will require another significant boost from bullish external factors (e.g., cold weather). Without such a spark there is still a reasonable chance that natural gas prices are settling into a trading range between nominally $2.78 and $2.49.

To that end, this afternoon’s pullback from today’s $2.74 high has already retraced 21 percent of the rise from $2.425. This pullback suggests that there is a reasonable chance for a deeper test of support before rising to challenge $2.74 again. For the move up to overcome $2.74 and make the push to $2.78 during the next few days, $2.62 must hold. Closing below this would signal that a trading range is forming and call for $2.55 and possibly $2.49. The $2.49 level is the gateway for a bearish outlook because this is the smaller than target of the newly formed primary wave down from $2.835.

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 fell as expected this morning and took out support around $2.51 before stalling at the $2.45 target. Taking out $2.51 was bearish for the outlook because this is the 62 percent retracement of the rise from $2.263. However, $2.51 held on a closing basis and a daily bullish hammer formed. This pattern suggests natural gas will rise to challenge resistance around $2.62 during the next couple of days and that prices might begin to consolidate into a trading range while waiting on more information from supply/demand factors (e.g., weather).

Natural gas might be hard-pressed to overcome $2.62 without a bullish shift in weather or other factors. However, closing above $2.62 will call for $2.67 and possibly $2.73. Settling above $2.73 would reflect a renewed bullish shift in sentiment and call for $2.85, the barrier to a firm bullish outlook.

With that said, a one day move up and unconfirmed hammer pattern is not enough to definitively call for the recent move down to end. Yesterday’s gap down and decline below the $2.589 swing low was a clear bearish shift in recent sentiment. Taking out $2.50 will call for another test of $2.45, a close below which will clear the way for a continued decline.

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 in the coming weeks is bullish after breaking higher out of a broadening wedge and meeting the $2.90 smaller than (0.618) target of the primary wave up from $2.263. This wave now favors an eventual rise above the crucial and psychologically important $3.00 level to reach its $3.10 equal to (1.00) target.

However, the 50-day moving average held on a closing basis again and the decline from $2.899 has formed two sequential daily shooting stars. The wave formation is also poised to test $2.66 before the move up continues. Therefore, the near-term outlook leans bearish.

The move down is most likely a corrective throwback to test the upper trend line of the broadening wedge, which is in line with $2.66. This is also the 38 percent retracement of the rise from $2.263. Therefore, $2.66 is expected to hold. Closing below this will dampen odds for a continued rise and call for $2.58 and then a test of key support and the barrier to a renewed bearish outlook at $2.52.

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 is bullish after challenging a crucial target around $2.74 today. Nevertheless, this objective and the $2.775 swing high held on a closing basis. Therefore, $2.74 is still a factor for the near-term. Closing above this and overcoming the $2.775 swing high will confirm a winter bottom has been made and clear the way for a push toward the next major objective and a long-term bullish decision point at $3.00.

Nevertheless, the wave formation up from $2.263 is due for a test of support before rising much higher. Moreover, today’s high wave candlestick (long upper and lower shadows) reflects uncertainty. Therefore, there is a reasonable chance for a test of $2.663 and possibly $2.58 before natural gas settles above $2.74 and overcomes the $2.775 swing high. Support at $2.58 is expected to hold. Closing below this will call for a deeper test of support where $2.46 is the barrier to a renewed bearish 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.