Natural Gas Price Forecast – January 6, 2021

Tag: Technical Analysis

Natural Gas Technical Analysis and Near-Term Outlook

The outlook for natural gas is bullish after challenging a crucial target around $2.74 today. Nevertheless, this objective and the $2.775 swing high held on a closing basis. Therefore, $2.74 is still a factor for the near-term. Closing above this and overcoming the $2.775 swing high will confirm a winter bottom has been made and clear the way for a push toward the next major objective and a long-term bullish decision point at $3.00.

Natural Gas - $0.035 Kase Bar Chart
Natural Gas – $0.035 Kase Bar Chart

Nevertheless, the wave formation up from $2.263 is due for a test of support before rising much higher. Moreover, today’s high wave candlestick (long upper and lower shadows) reflects uncertainty. Therefore, there is a reasonable chance for a test of $2.663 and possibly $2.58 before natural gas settles above $2.74 and overcomes the $2.775 swing high. Support at $2.58 is expected to hold. Closing below this will call for a deeper test of support where $2.46 is the barrier to a renewed bearish 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.

WTI Crude Oil Technical Analysis and Short-Term Forecast

WTI crude oil shook off yesterday’s decline with ease, reflecting a bullish shift in external factors. Although $50.0 held on a closing basis, the close above the highly confluent $49.6 objective clears the way for $51.0 and $52.1 during the next few days. Both are confluent wave projections but $52.1 is most important because it is the equal to (1.00) target of the primary wave up from the February contract low of $27.22.

With that said, the wave formation up from $34.50 is due for a correction and daily momentum oscillators are either overbought or setup for bearish divergence. Therefore, a significant test of support is expected once $52.1 is met, and before this objective is overcome on a sustained closing basis.

WTI Crude Oil - $0.35 Kase Bar Chart
WTI Crude Oil – $0.35 Kase Bar Chart

Nevertheless, as the move up extends toward $52.1 in the coming days, support at $49.1 will likely hold and $48.3 is key for the near-term. Settling below $48.3, which is near today’s open and in line with the 62 percent retracement of the rise from $47.18, would shift near-term odds in favor of $47.8 and possibly $47.2. Closing below $47.2 would call for the move down to take out the $47.18 swing low and signal that a significant test of support is finally underway.

This is a brief analysis for the next day or so. Our weekly Crude Oil Forecast and daily updates are much more detailed and thorough energy price forecasts that cover WTI, Brent, RBOB Gasoline, Diesel, and spreads. If you are interested in learning more, please sign up for a complimentary four-week trial.

Gold Technical Analysis and Near-Term Outlook

Gold challenged crucial resistance around $1894 and settled above the 50-day moving average today. This is quite bullish for the outlook because $1894 is the 62 percent retracement of the decline from $1973.3, the 38 percent retracement from $2099.2, and, most importantly, the smaller than (0.618) target of the primary wave up from $1767.2. Most waves that meet the smaller than target rise to fulfill at least the equal to (1.00) target, in this case, $1930. Consequently, due to the confluence and importance of $1894, a sustained close above this objective would be a firm warning that the move down from $2099.2 might be complete and suggest that a longer-term bullish outlook is being readopted.

Gold - $10 Kase Bar Chart
Gold – $10 Kase Bar Chart

With that said, because $1894.0 held on a closing basis there is a reasonable chance for a corrective pullback to $1872 and possibly $1852 first. Support at $1852 is expected to hold. Closing below this will call for a test of key near-term support at $1833. This threshold is in line with the 50 percent retracement of the rise from $1767.2 and the 200-day moving average. Closing below $1833 would call for a move below the $1820.0 swing low. This would invalidate the wave up from $1767.2 that makes the connection from $1894 to $1930 and higher and confirm that the move up has failed.

This is a brief analysis for the next day or so. Our weekly Metals Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key COMEX precious metals futures contracts and LME Non-Ferrous (Base) metals, spot gold, the gold/silver ratio, and gold ETFs. If you are interested in learning more, please sign up for a complimentary four-week trial

Natural Gas Technical Analysis and Near-Term Outlook

Natural gas formed another hanging man pattern today. As discussed yesterday, this would normally dampen odds for a larger test of resistance. However, the intra-day wave formation up from $2.368 looks to be unfolding as a five-wave pattern, and the move up from $2.596 is likely Wave V, which targets $2.80. This is the XC (2.764) projection of Wave I, the smaller than (0.618) target of Wave III, and the larger than (1.618) target of Wave 1/V. The connection to $2.80 is made through $2.72 and then $2.76.

Natural Gas - $0.035 Kase Bar Chart
Natural Gas – $0.035 Kase Bar Chart

Once $2.80 is met, a significant three-wave test of support is anticipated. An eventual close above $2.80 would call for the move up to unfold as a larger five-wave pattern (or at least a nested three-wave pattern) that targets $2.93 and higher.

With that said, the hanging man patterns warn that the move up might be a simple three-wave correction of the decline from $3.507 that is stalling around $2.70. Should natural gas take out the $2.618 swing low look for a test of $2.58. This is the 38 percent retracement of the rise from $2.368 and is a level that must hold for the move up to continue to unfold as a five-wave pattern as expected. Settling below $2.58 would call for a test of key support at $2.50, a close below which would confirm the corrective move up is over and would shift odds back in favor of a continued decline.

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.

WTI Crude Oil Technical Analysis and Short-Term Forecast

The outlook for WTI crude oil remains bullish. WTI rose to challenge $47.6 as expected today. However, the move up stalled at $47.73 and might be forming a small double top with the $47.74 swing high. This is doubtful though because the waves up from $44.95 and $45.69 have overcome their smaller than targets and favor a continued rise to at least $47.9 and likely $48.7 during the next few days. The $48.7 target is the most confluent objective and a potential stalling point. Settling above $48.7 will call for the next major objective and bullish decision point at $49.5.

WTI Crude Oil - $0.25 Kase Bar Chart
WTI Crude Oil – $0.25 Kase Bar Chart

Nevertheless, should WTI take out initial support at $47.0 before overcoming the $47.74 swing high the odds that a double top has formed will increase. This would also call for a test of crucial near-term support at $46.5. Settling below this will shift odds in favor of challenging $45.7, which is in line with the $45.69 swing low and the confirmation point of the double top. Closing below $45.7 will confirm the double top and call for WTI to fall toward the pattern’s $43.6 target.

This is a brief analysis for the next day or so. Our weekly Crude Oil Forecast and daily updates are much more detailed and thorough energy price forecasts that cover WTI, Brent, RBOB Gasoline, Diesel, and spreads. If you are interested in learning more, please sign up for a complimentary four-week trial

Gold Technical Analysis and Near-Term Outlook

Gold is hovering just above a bearish decision point at $1824. This objective is split between the 200-day moving average, the $1824.8 swing low, the smaller than (0.618) target of the wave down from $1879.8, and the 50 percent retracement of the rise from $1767.2. Settling back below the 200-day moving average would imply that the corrective move up from $1767.2 is complete. Closing below $1807, the confluence point between the equal to (1.00) target of the wave down from $1879.8 and the 62 percent retracement of the rise from $1767.2, will confirm this and clear the way for $1780 and lower.

Gold - $10 Kase Bar Chart
Gold – $10 Kase Bar Chart

Nevertheless, while the $1824.8 swing low holds the initial wave up from $1767.2 that met its smaller than target at $1879.8 will continue to call for its $1910 equal to target to be fulfilled. More importantly, rising to $1910 would overcome key resistance at $1896. This is the 62 percent retracement of the decline from $1973.3, the 38 percent retracement from $2099.2, and the smaller than target of the newly formed primary wave up from $1767.2. Settling above $1896 would suggest the larger scale move down might be complete and would call for gold to push toward targets well above $1910.

This is a brief analysis for the next day or so. Our weekly Metals Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key COMEX precious metals futures contracts and LME Non-Ferrous (Base) metals, spot gold, the gold/silver ratio, and gold ETFs. If you are interested in learning more, please sign up for a complimentary four-week trial.

Natural Gas Technical Analysis and Near-Term Outlook

The outlook for natural gas remains bearish due to the sustained close below $2.48. This was a highly confluent and crucial wave projection for the January contract and the continuation chart that connects to $2.15 as the next major objective. Near-term odds favor a continued decline and a close below $2.37 will clear the way for $2.33 and likely lower during the next couple of days.

Natural Gas - $0.035 Kase Bar Chart
Natural Gas – $0.035 Kase Bar Chart

With that said, Monday’s potential intra-day exhaustion gap, today’s inverted hammer, and confirmed weak bullish KasePO, KaseCD, and MACD divergences suggest a bottom might be forming. These signals do not exude a bullish shift in sentiment, but a move above $2.52, the smaller than (0.618) target of the wave up from $2.368, will call for a test of $2.58. Rising to $2.58 would overcome Monday’s gap down and confirm that this was most likely an exhaustion pattern. A close above $2.58 would call for a larger test of resistance with the next thresholds at $2.67 and $2.76.

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.

WTI Crude Oil Technical Analysis and Short-Term Forecast

The long-term outlook for WTI crude oil is bullish. However, a confirmed daily RSI divergence and daily bearish doji suggest the pullback from $46.68 should extend a bit lower before the move up continues. Today’s decline to $45.14 fulfilled the equal to (1.00) target of the primary wave down from $46.68. The subsequent move up to $45.93 has been lackluster so far. Another test of $46.1 is expected, a close below which will clear the way for $44.4 and possibly $43.9 during the next few days.

WTI Crude Oil - $0.25 Kase Bar Chart
WTI Crude Oil – $0.25 Kase Bar Chart

With that said, this has become a very tight call because of a small intra-day double bottom that formed between today’s $45.14 and $45.16 swing lows. The wave up from $45.14 has overcome its smaller than (0.618) target, which implies that the double bottom’s $45.93 confirmation point will likely be challenged early tomorrow. Closing above $45.93 will confirm the double bottom and clear the way for $46.4 and possibly $46.9.

Resistance at $46.4, which the 62 percent retracement of the decline from January’s $58.92 swing high is expected to hold. Nonetheless, $46.9 is most important for the near-term outlook because this is in line with the double bottom’s target and the smaller than target of the wave up from $43.92. Settling above $46.9 would confirm that the corrective pullback is over and would open the way for the next leg of the move up to unfold.

This is a brief analysis for the next day or so. Our weekly Crude Oil Forecast and daily updates are much more detailed and thorough energy price forecasts that cover WTI, Brent, RBOB Gasoline, Diesel, and spreads. If you are interested in learning more, please sign up for a complimentary four-week trial.

Gold Technical Analysis and Near-Term Outlook

Gold rose to challenge $1849 resistance as called for in yesterday’s update. This level, which is split between the 38 percent retracement of the decline from $1973.3 and the 62 percent retracement from $1904.3, has held so far. Nonetheless, near-term odds still favor a continued rise due to the sustained close back above the 200-day moving average and settle (so far) above last week’s $1832 midpoint. Overcoming $1849 will call for $1862 and possibly $1872 ahead of the weekend. Key resistance and the barrier to a firm bullish near-term outlook is $1894. This is the 62 percent retracement of the decline from $1973.3 and the 38 percent retracement from $2099.2.

Gold - Daily Candlestick Chart
Gold – Daily Candlestick Chart

With that said, gold’s move up from $1767.2 lacks a wave that can support a larger rally. The retracements that have taken place during the move up have been minimal. It is rare to see a market rise above crucial resistance without an adequate wave structure. Also, due to the importance of $1849, there is a reasonable chance for a pullback to test support ahead of the weekend. This is the challenge for gold’s near-term outlook because a pullback large enough to create a wave that can sustain a larger rally will have to test the 38 percent retracement of the rise from $1767.2 around $1819. This is in line with the 200-day moving average, a close below which would signal that bears are taking control again. Settling below $1798 will confirm this and shift near-term odds in favor of $1776 and lower next week.

This is a brief analysis for the next day or so. Our weekly Metals Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key COMEX precious metals futures contracts and LME Non-Ferrous (Base) metals, spot gold, the gold/silver ratio, and gold ETFs. If you are interested in learning more, please sign up for a complimentary four-week trial.

Natural Gas Technical Analysis and Near-Term Outlook

Natural gas took out the $2.823 swing low and confirmed the small double top that formed around $3.00. Natural gas also settled below the 62 percent retracement of the rise from $2.656. Odds favor a continued decline and the waves and subwaves down from $3.002 call for a test of at least $2.70 and likely $2.66 tomorrow. The double top’s target is in line $2.66. The $2.66 objective is key because this is also the equal to (1.00) target of the wave down from $3.507 and the smaller than (0.618) target of the subwave down from $3.204. Settling below $2.66 will clear the way for the next leg of the move down to $2.54 and eventually $2.47.

Natural Gas - $0.025 Kase Bar Chart
Natural Gas – $0.025 Kase Bar Chart

There are no bullish reversal patterns or signals that call for the move down to stall. Even so, should natural gas bounce before falling much lower look for initial resistance at $2.84. Rising above this will call for $2.90, which is expected to hold. Key resistance is $2.97, the smaller than target of the wave up from $2.656 and the 38 percent retracement of the decline from $3.507. Settling above $2.97 would clear the way for $3.09 and possibly higher.

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.