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.
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.
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