Natural Gas Forecast: May Stalls at Key Resistance

Forecasts for warmer than normal temperatures next week in the Midwest and mid-Atlantic spurred natural gas higher on Tuesday. For several weeks the May natural gas contract oscillated in a range between approximately $1.86 and $2.04. The range was finally broken when prices settled above $2.04.

That said, the move up may have been too much too soon. Early Wednesday, the 1.00 projection for the wave $1.731 – 2.032 – 1.837 was met at $2.137. For weeks, this is a target we have been following and have stated is a crucial wave projection and decision point. A close over $2.14 would call for an extended upward correction that could ultimately transition into a long-term recovery.

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We doubt this will be the case. The move up is most likely corrective, and the market is trying to establish an upper boundary for a longer-term range. However, the potential for a long-term recovery is there should prices sustain a close over $2.14.

May has already pulled back from the $2.137 swing high and closed below an important $2.08 target on Wednesday. There are bearish daily divergence setups, confirmed intra-day overbought signals, and the wave formations call for a test of at least $2.04 on Thursday. A close below $2.04 would call for $1.97 and possibly $1.89.

This is a brief natural gas forecast for the next day or so. 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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