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.
Natural gas continued to rise after confirming daily bullish RSI, Stochastic, and MACD divergences and overcoming the smaller than (0.618) target of the wave up from $2.738 on Tuesday. Today’s rise has positioned natural gas to challenge this wave’s $2.92 larger than (1.618) target. The move up is likely a correction, and a simple correction will hold $2.92. Closing above this will call for a more significant test of resistance in the coming days, with targets around the psychologically important $3.00 level.
That said, prices are pulling back and have taken out the 21 percent retracement of the rise from $2.738. A correction of the rise from $2.738 should hold the 38 percent retracement at $2.85. Falling below this will call for the key 62 percent retracement to be challenged. Closing below $2.81 will imply that the corrective move up from $2.738 is complete and put the near-term odds in favor of natural gas falling to challenge $2.76 and lower in the coming days.
