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 settled below the crucial $3.04 target for the past three days. The sustained close below $3.04 is bearish for the outlook because the wave formation down from $4.946 now calls for a test of at least $2.91 and likely the next major objective at $2.83. The decline to $2.955 also took out an important $2.990 swing low on the continuation chart. This negated a five-wave pattern up from the $1.481 swing low and dampened the longer-term odds for a continued rise.
That said, the psychologically important $3.00 level has held on a closing basis, and today’s inside day reflects near-term uncertainty. Any move up will likely be a correction. Even so, settling above key near-term resistance at $3.21 will shift the near-term odds in favor of a larger correction to challenge $3.29 and possibly $3.37.
