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 stalled at $3.55, in line with the 89 percent retracement of the decline from $3.585, before plummeting to challenge the 50 percent retracement of the rise from $3.055 at $3.32 again. The $3.32 level held, but today’s close below the $3.37 smaller than (0.618) target of the wave down from $3.585 was bearish for the outlook in the coming days. This wave now favors a test of its $3.26 equal to (1.00) target. This is also the 62 percent retracement of the rise from $3.055. Settling below $3.26 will strongly imply that the corrective move up from $3.055 is complete, opening the way for $3.16 and lower.
Today’s bearish engulfing line already suggests that the corrective move up is complete and significantly dampens the odds for a continued rise in the coming days. Nonetheless, because $3.32 held, there is a modest chance for prices to recover. Resistance at $3.40, the 38 percent retracement from $3.550, is expected to hold. Key near-term resistance is the 62 percent retracement and the smaller than target of the wave up from $3.296 at $3.47. Closing above this will call for $3.57 and possibly a test of the $3.62 smaller than target of the primary wave up from $3.055.
