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.
April natural gas is struggling to settle above a confluent and important target at $1.96. This is the equal to (1.00) target of the wave up from $1.600 and the larger than (1.618) target of the first subwave up from $1.683. This target has held on a closing basis for the past few days. The pullback from $2.009 warns that a test of $1.90 will probably take place before the move up extends. Even so, the move down will likely prove to be a simple correction and should hold $1.900. The near-term outlook for natural gas remains bullish and closing above $1.960 will call for another test of $2.00 and likely a push to challenge $2.03 and then the $2.07 intermediate (1.382) target of the wave up from $1.600.
With that said, should the corrective pullback from $2.009 take out $1.90 look for a test of key near-term support at $1.85. This is the larger than target of the wave down from $2.009 and the 38 percent retracement of the rise from $1.600. A normal correction should hold $1.85. Closing below this would shift the near-term odds in favor of a more substantial test of support where $1.76, the XC (2.764) projection and 62 percent retracement, is most important. Settling below $1.76 would reflect a bearish shift in sentiment and imply that the move up is complete.
