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.
