Natural Gas Price Forecast – May 27, 2020

July natural gas, which is now the prompt month futures contract, held $1.96 resistance and is poised to challenge at least $1.83 and likely $1.78 during the next few days. The $1.78 target is the lowest the first wave down from $2.027 projects and the equal to (1.00) target of the primary wave down from $2.027. Closing below $1.78 will call for prices to fall toward $1.70 where the continuation chart’s rollover gap up from June’s $1.722 settle will be filled.

The $1.70 objective is also the smaller than (0.618) target of the largest wave down from $2.364. Closing below $1.70 may be a challenge without help from bearish external factors. Also, due to the importance of $1.70 and its connection to a new 2020 continuation chart low, it is doubtful that prices fall below $1.70 without another significant test of resistance first.

Natural Gas – $0.030 Kase Bar

There is an immediate support target at $1.86 that may hold early tomorrow. This is the smaller than (0.618) target of the primary wave down from $2.027 and makes the connection to $1.78 and $1.70. Resistance at $1.95 is expected to hold and $2.02 is key. Settling above $2.02 would shift near-term odds in favor of $2.07 and possibly higher before another downturn.

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.

During the past few days June natural gas has risen to challenge the lower trend line of the bearish flag pattern that prices broke lower out of on May 12. This is common after breaking lower out of this type of pattern. The pullback is most likely corrective and briefly overcame the lower trend line this morning. The trend line is also in the vicinity of the 21- and 50- day moving averages and a few crucial wave projections and the 50 percent retracement of the decline from $2.162. All of these levels held on a closing basis. The subsequent move down left a long upper shadow on the daily candlestick and retraced 50 percent of the move up from $1.595.

Natural Gas – $0.035 Kase Bar

Today’s price action was bearish for the outlook during the next few days and calls for a test at least $1.71. This is the 62 percent retracement of the move up from $1.595, a close below which will significantly increase odds for another attempt at $1.59. The $1.59 objective is still a relatively confluent and important target that could hold. However, settling below this would call for $1.55, which is now the last level of support protecting the $1.519 swing low on the continuation chart.

The decline from $1.889 lacks a definitive wave structure, so a test of resistance might take place early tomorrow. Resistance at $1.83 is expected to hold. Key resistance is $1.87. Settling above this would put prices back above the flag’s lower trend line and call for a push toward $1.92, which then connects to $2.02. This is doubtful but would reflect a bullish shift in fundamental factors and near-term sentiment.

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.

June natural gas broke support at $1.66 and fell to a new contract low of $1.595. Based on the waves and sub-waves down from $2.162 this is a highly confluent objective and a potential stalling point. Nonetheless, closing below $1.59 will call for $1.53, the last target protecting the continuation chart’s $1.519 swing low. Settling below $1.519 remains doubtful, but would clear the way for $1.45 and possibly $1.40.

Natural Gas – $0.035 Kase Bar

There are no bullish signals or patterns that suggest the move down will end. However, the wave structure down from $2.162 lacks a definitive test of resistance and is due for an upward correction before prices push much lower.

Prices have risen late this afternoon and will probably challenge today’s $1.66 midpoint early tomorrow. Rising above this would call for a test of $1.71. For now, $1.71 is expected to hold, but a close above this would call for $1.81. This is the 38 percent retracement of the decline from $2.162 and must hold for the move down to extend during the next few days. Settling above $1.81 would imply the decline has stalled again and would call for a much more substantial test of resistance in the coming days and possibly weeks.

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 could not overcome Tuesday’s $2.162 swing high and make the push for key resistance and the gateway for a much more bullish outlook at $2.21. Instead, prices fell and took out the 38 percent retracement of the move up from $1.649. This is bearish for the near-term but doe not mean that the move up is over. Rather, as suspected for the past few weeks, prices are still settling into a wide and volatile trading range.

Tomorrow, look for natural gas to challenge at least $1.91 and likely $1.86. The $1.86 objective is the 62 percent retracement of the move up from $1.649 and is expected to hold. Closing below this would reflect a bearish shift in sentiment and severely dampen odds for a continued rise during the next few days.

Natural Gas – $0.035 Kase Bar

The move down from $2.162 was aggressive but lacks a meaningful wave formation. Therefore, once $1.86 is met odds for a test of resistance will increase. For now, $2.02 will likely hold and $2.07 is key. Settling above $2.07 will shift near-term odds in favor of another attempt at $2.17 and 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.

Natural gas is settling into a wide trading range as expected. Today, prices fell to challenge $1.86, the 62 percent retracement of the move up from $1.765. This is a potential stalling point but based on the waves down from $2.100 and $2.018 odds lean in favor of falling to $1.82. A test of resistance is expected before prices close below $1.82. Closing below $1.82 would clear the way for $1.69, which is near the bottom of the trading range for the June contract.

Natural Gas – $0.035 Kase Bar

As prices fall toward $1.82 resistance at $1.92 is expected to hold and $1.96 is key. Settling above $1.96 will call for another attempt at $2.03, which then connects to $2.11 and higher. Without help from bullish external factors, it is doubtful that natural gas will overcome $2.03.

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.

As expected in the weekly Commentary, prompt month natural gas prices have been trading in an erratic manner this week. Crucial resistance at $1.95 has held on a closing basis so far, but today’s move up invalidates yesterday’s bearish dark cloud cover. Based on this and the waves up from $1.521, $1.555, and $1.774, natural gas should make a push for at least $1.97 and likely $2.04 before the end of the week. Closing above $2.04 will call for key upper resistance at $2.10.

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

The challenge is that for the move up to be sustained fundamental data will have to reflect a strong bullish change in supply and demand. Technical factors can push prices to $2.04 and maybe $2.10, but anything higher than that, or a sustained move above $2.00, will have to be backed by bullish fundamentals. This means that there is still quite a bit of downside risk.

Should natural gas fall below $1.85 before overcoming $1.97 look for another attempt at $1.80 and possibly $1.75. The $1.75 level is the 62 percent retracement of the move up from $1.521. Therefore, a close below $1.75 would shift odds in favor of $1.68 and then a move back toward the $1.555 and $1.521 swing lows.

With all factors considered, natural gas prices should rise a bit higher during the next few days. But the move up will probably be short-lived and another major test of support is likely without help from external factors. Therefore, for the bigger picture, the most probable scenario is a wide trading range, the boundaries of which are still be defined.

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.

The outlook for natural gas is firmly bearish and today’s nominal close below $1.60 clears the way for a test of $1.54 and possibly $1.50. These are the intermediate (1.382) and larger than (1.618) targets of the primary wave down from $1.918, respectively. The sub-waves down from $1.813 also show that these two objectives are highly confluent. Therefore, a test of resistance is expected before natural gas settles below $1.50.

Natural Gas – $0.025 Kase Bar

Based on the wave structure and bearish sentiment, natural gas should fall to at least $1.54 before another reasonable test of resistance. Nonetheless, should prices rise sooner, look for initial resistance at $1.63 and then $1.67. The latter is expected to hold. Key near-term resistance is $1.73. Settling above $1.73 would call for a larger upward correction to $1.79 and possibly higher. This would also suggest that prices may settle into a trading range before falling to challenge major support around $1.50.

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 in an aggressive manner again today and settled above the 62 percent retracement of the decline from $2.044. This suggests prices will likely rise to challenge $2.00 and possibly higher again soon. There are no reversal patterns or setups that call for the move up to stall. However, there is a significant objective at $1.93 as the larger than (0.618) target of the only decipherable wave up from $1.521. This is also the 78 percent retracement of the decline from $2.044. Therefore, because the move up currently lacks a wave structure that can support a move above $2.00, there is a good chance natural gas will stall near $1.93. From there, a downward correction should take place before prices rise to $2.00 and higher.

The key for the move up will be holding resistance at $1.76 on a test of support. Since February, there have been two other moves up on the continuation chart to challenge resistance around or just above $2.00. Both moves, one up from $1.753 to $2.025 and then other from $1.610 to $1.998, failed on the first sign of any weakness and a test of support. Therefore, until a reasonable test of support holds it will be hard to call for a sustainable move above $2.00.

Natural Gas – $0.035 Kase Bar

For May natural gas the key threshold is $1.76, the 38 percent retracement of the move up from $1.521. Closing below this would suggest the move up has failed again and would call for $1.67 and possibly $1.59. The latter of these is the smaller than target of the wave down from $2.044 and connects to targets well below the current $1.521 contract low.

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.

May natural gas fell to a new contract low of $1.580 today and settled below the $1.593 larger than (1.618) target of the first wave down from $2.044. The move down is poised to extend. Based on the waves down from $1.782 and $1.731, the prompt month should reach at least $1.56 and likely $1.50. The $1.50 objective is most important. Once met, there is a good chance for another test of resistance before prices fall to the next objectives at $1.46 and lower.

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

Support at $1.56 may initially hold because this is the equal to (1.00) target of the wave down from $1.782. Nonetheless, should prices rise form this level before reaching $1.50 look for resistance at $1.64 to hold. Rising above this would call for $1.67 and possibly $1.71. There is nothing on the charts that calls for a move above $1.67, so overcoming this level is doubtful during the next few days. Even so, key resistance and the barrier for a bullish near-term outlook is $1.71. Settling above $1.71 would clear the way for $1.76 and 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.

The long-term outlook for natural gas remains bearish and the recent move up from $1.804 is most likely corrective. However, Tuesday’s confirmed daily bullish RSI divergence and the wave up from $1.804 call for a larger test of resistance before the decline continues.

Today, natural gas stalled just below $1.84 support and the subsequent move up most likely forms the impulse leg of the primary wave up from $1.804. The $1.88 smaller than (0.618) target of this wave has nearly been met this afternoon and the equal to (1.00) target is $1.91. Settling above $1.91 will call for key near-term resistance at $1.96, a close above which will clear the way for a larger upward correction to $2.00 and higher.

Support at $1.83 is crucial because a move below this would take out the $1.825 intra-day swing low and invalidate the wave up from $1.804 that projects to $1.91 and higher. In turn, this would shift near-term odds back in favor of $1.79 and lower.

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.