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.
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.