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.
December natural gas initially fell to test and hold the 38 percent retracement of the rise from $2.514 and the 20-day moving average at $2.82. Prices then rallied and natural gas settled above the $2.95 equal to (1.00) target of the primary wave up from $2.514. This wave, and the subwave up from $2.643, now call for a test of $3.07 within the next day or so. This is a crucial objective because $3.07 is the intermediate (1.382) target of the wave up from $2.514, the smaller than (0.618) target of the wave up from $2.643, the 38 percent retracement of the decline from $3.959, and the 62 percent retracement from $3.406. The $3.07 objective is also near the XC (2.764) projection of the wave up from the $1.856 double bottom on the continuation chart. Settling above $3.07 might initially be a challenge but will open the way for natural gas to rise to $3.14 and higher.
Nevertheless, the $3.013 swing high held and prices settled below the psychologically important $3.00 level. Should natural gas fall again and take out the $2.89 smaller than target of the wave down from $3.013 look for another attempt to close below $2.82. This is now the equal to target of the wave down from $3.013. Settling below $2.82 would warn that the move up is failing and call for a test of $2.76 and possibly $2.71 in the coming days.
