Natural Gas Forecast: Bearish Flag Calls for Continued Decline

By Dean Rogers

Natural gas continues to hold the lower end of the trading range between $2.65 and $2.95 on a closing basis. October natural gas futures stalled at $2.641 and subsequently formed a bearish flag (blue trend lines). Flags are generally a reliable type of continuation pattern, which means the flag should break lower soon. The next targets are $2.62 and $2.55.

natural gas

A daily morning star setup (not shown) indicates the upward correction may extend. Resistance at $2.75 should hold. This is the 38 percent retracement from $2.959, the 62 percent retracement from $2.816, and the 1.382 projection of the wave up from $2.641. A close over $2.75 would confirm the morning star and call for an extended correction $2.80 and possibly $2.85.

Overall, our bias remains negative. Therefore, even if prices rose to test resistance we expect $2.75 to hold and for natural gas to continue its decline.

This is a brief natural gas forecast ahead of tomorrow’s EIA report. Our weekly Natural Gas Commentary is a much more detailed and thorough analysis. If you are interested in learning more, please sign up for a complimentary four week trial.

Published by

Dean Rogers, CMT

Dean Rogers, CMT is the general manager of the Kase Call Center in Albuquerque, New Mexico. He oversees all of Kase and Company, Inc.’s operations including research and development, marketing, and client support. Dean began his career with Kase in early 2001 as a programmer but has developed into Kase’s senior technical analyst. He writes Kase’s award-winning weekly Crude Oil, Natural Gas, and Metals Commentaries. He is an instructor at Kase's classes and webinars and provides all of the necessary training and support for Kase's hedging models and trading indicators for both retail and institutional traders.

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