Natural Gas Technical Analysis and Near-Term Outlook
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November natural gas shook off Tuesday’s long-legged doji and took out the $2.439 swing low. This negated a double bottom that had formed between the $2.450 and $2.439 swing lows. Prices also settled below the $2.46 smaller than (0.618) target of the wave down from $3.019 and the $2.37 smaller than target of the wave down from $2.727. These waves now call for a test of $2.30 and $2.27. The $2.27 objective is also the equal to (1.00) target of the wave down from $3.988. The outlook is bearish heading into tomorrow and the move down should reach at least $2.30 within the next day or so. Such a move will cause November to take out its $2.345 contract low.
The area of support between $2.27 and $2.30 is highly confluent though and a probable stalling point. The daily KaseCD and RSI are oversold. There are also oversold KasePO and RSI oscillators on the $0.025 Kase Bar chart. These momentum oscillators and the MACD are also set up for bullish divergence. Furthermore, $2.30 is the 62 percent retracement of the rise from $1.856 on the continuation chart. Therefore, a solid test of resistance is anticipated once $2.27 is met and before closing below $2.30.
Should November natural gas rise tomorrow look for initial resistance at today’s $2.43 midpoint. This is in line with the 21 percent retracement of the decline from $2.727. Overcoming $2.43 would call for a test of key near-term resistance at $2.50. The $2.50 level is near today’s open, the 21 percent retracement from $3.019, and the 38 percent retracement from $2.727. Settling above $2.50 would shift the near-term odds in favor of challenging $2.55 and another key level at $2.60 in the coming days.
