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 rallied today and settled well above a key $3.07 target, overcame the last major swing high at $3.101, and challenged another confluence point at $3.21 that held on a closing basis. Daily trend indicators are bullish and the wave formation up from $2.514 calls for a continued rise. The daily Stochastic is overbought but can remain in that state for a long period. Otherwise, there are no daily bearish patterns or signals that call for a reversal.

Overcoming $3.24 will call for a test of the $3.31 larger than (1.618) target of the waves up from $2.643, $2.688, and $2.832. This objective is also in line with the 200-day moving average. This is a point from which a test of support might take place given the confluence of $3.31. Even so, any move down will likely be a correction. This is because the primary wave up from $2.514 settled above its larger than (1.618) target today and now favors an eventual test of the $3.48 XC (2.764) projection. Along the way to $3.48, look for a target at $3.41 that is in line with the 62 percent retracement of the decline from $3.959.

Should a correction take place before overcoming $3.24 look for initial support at $3.13. This is the equal to (1.00) target of the small wave down from $3.229. Falling below this would call for a test of this wave’s larger than target, today’s midpoint, and the 21 percent retracement of the rise from $2.514 at $3.08. Settling below $3.08 is doubtful but would call for a test of key near-term support at $2.96. This is in line with the 38 percent retracement and today’s open.

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.

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 failed to capitalize on Tuesday’s decline and the close at Monday’s $2.76 midpoint. Monday’s initial gap down was likely an exhaustion pattern and was followed by the formation of a daily bullish engulfing line that helped to confirm daily bullish KasePO, KaseCD, RSI, Stochastic, and MACD divergences. These patterns and signals indicate that a bullish reversal for the December contract might be underway.

Furthermore, today’s rise to $2.80 suggests that Tuesday’s pullback was the corrective leg of a wave up from $2.514 that projects to $2.84 as the smaller than (0.618) target. Overcoming $2.80 will call for a test of $2.84, a close above which will open the way for $2.88 and then a test of this wave’s $2.96 equal to (1.00) target.

However, this is still a somewhat tight call for the near term. The late move down from $2.796 has taken out the 38 percent retracement of the rise from $2.651. The small wave down from $2.796 makes a connection to the $2.70 level, which is in line with the 62 percent retracement and smaller than target of the wave down from $2.818. Falling below $2.70 will call for a test of this wave’s $2.63 equal to target. The $2.63 level is key support for the near term because it is also the 62 percent retracement of the rise from $2.514. Closing below $2.63 will put the near-term odds in favor of prices falling to the $2.57 intermediate (1.382) and $2.53 larger than (1.618) targets.

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 settled a penny lower today and is still in a position to work its way lower in the coming days. The 78 percent retracement of the rise from $2.712 at $2.80 has been resilient and held on a closing basis for the past few days. Another test of $2.80 is expected tomorrow. Falling below this will call for the $2.77 smaller than (0.618) target of the wave down from $2.919. This wave then connects to $2.72 as the equal to (1.00) target. The $2.72 objective is also in line with the smaller than target of the wave down from $3.101. Settling below $2.72 will clear the way for a move below the $2.712 swing low to challenge the $2.67 smaller than target of the wave down from $3.406.

Nevertheless, a bullish KasePO divergence on the $0.03 Kase Bar chart and the wave up from $2.770 warn that a test of $2.89 might take place first. This level is expected to hold. Overcoming $2.89 will call for key near-term resistance at $2.94 to be challenged. Settling above $2.94 would put the near-term odds in favor of challenging the 62 percent retracement from $3.101 at $2.98 and then the $3.01 smaller than target of the wave up from $2.712.

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.

November natural gas rallied late this afternoon to challenge the $2.42 equal to (1.00) target of the wave up from $2.210 and the $2.44 larger than (1.618) target of the wave up from $2.258. Weak daily bullish KasePO PeakOut and RSI oversold signals suggest a bullish reversal, or at least a solid test of resistance, is underway. Tomorrow, look for a test of $2.48 and possibly a key objective at $2.53. Settling above $2.53 will reflect a bullish shift in sentiment and provide more substantial evidence that a reversal will continue to unfold.

That said, until this afternoon’s late rally, the move up from $2.210 had been shallow and choppy. This suggests that the move up may still be a simple correction and that this afternoon’s rally could be a bull trap before the move down extends. Even so, falling to a new low has become doubtful within the next few days and the 38 percent retracement of the rise from $2.210 at $2.35 is expected to hold. Falling below this will call for a test of the 62 percent retracement at $2.30 and possibly key support at $2.26. Taking out $2.26 (more specifically, the $2.258 swing low) will invalidate the wave up from $2.210 which projects to $2.48 and $2.53. In this case, look for prices to fall to $2.21 and lower.

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.

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.

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.

November natural gas closed below the 62 percent retracement of the rise from $2.439 and the 50-day moving average today. This strongly suggests that November’s move up from $2.439 is complete. The move down is now poised to test a confluent but relatively minor target at $2.61 and then an important objective at $2.58. The $2.58 target is in line with the 78 percent retracement of the rise from $2.439 and is the 38 percent retracement of the rise from $1.856 on the continuation chart. A normal correction of the move up from $1.856 on the continuation chart will hold $2.58. Settling below this will clear the way for tests of $2.52 and $2.46 in the coming days.

There are no bullish patterns, signals, or setups that call for the move down to stall. Even so, should prices rise tomorrow look for resistance at today’s $2.68 midpoint and the $2.71 open. Key resistance for the near-term outlook is the 38 percent retracement of the decline from $3.019 at $2.78.

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 rose to challenge the psychologically important $3.00 level today. This is also a confluent wave projection and retracement level on the November chart that sits just above the 200-day moving average. The outlook for natural gas is bullish and closing above $3.00 will call for $3.05, $3.12, and eventually the $3.20 target of a confirmed double bottom.

That said, this is a tight call for the next few days. The move up is due for a correction and $3.00 is the most probable point from which such a move will take place. Monday’s evening star setup, Tuesday’s long-legged doji, and today’s shooting star also warn that a correction will take place before the move up extends. Settling below $2.83 will complete these patterns and call for a test of the 38 percent retracement of the rise from $2.439 at $2.79. A simple correction will hold $2.79. Settling below this will call for the $2.75 confirmation point of the bearish daily candlesticks to be challenged. Closing below $2.75 is doubtful but would suggest that a bearish reversal and much more significant test of support is underway.

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 entered a period of consolidation in recent weeks that will likely lead to an eventual break higher. Today, the prompt month October contract tested and held a key level at $2.30 on a closing basis. This sits just above the smaller than (0.618) target of the waves up from $1.991 and $2.021 and is in line with the $2.301 confirmation point of a $1.856 double bottom on the continuation chart. Another test of $2.30 is anticipated within the next couple of days. Settling above $2.30 will open the way for a push to challenge $2.39 and likely $2.46.

Nevertheless, resistance around $2.30 has been resilient for the past few days. The late pullback from today’s $2.325 high warns that natural gas will continue to consolidate as traders wait for more evidence of bullish fundamentals and sentiment. A simple test of support should hold the 38 percent retracement of the rise from $2.021 at $2.21. Falling below this will call for an attempt to take out key near-term support and the 62 percent retracement at $2.14. Settling below $2.14 would put the near-term odds in favor of testing the $2.08 smaller than (0.618) target of the wave down from $2.421.