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 settled below the $3.07 smaller than (0.618) target of the primary wave down from $5.210 today. This was a bearish decision point for the coming weeks and perhaps months because this wave now favors an eventual test of its $2.37 equal to (1.00) target. Prices must still contend with support at the psychologically important $3.00 level. Even so, the intraday wave down from $3.190 calls for a test of its $2.98 XC (2.734) projection. Closing below this will confirm a break of $3.00, opening the way for $2.95, $2.87, and $2.82 in the coming days.
There are no bullish patterns or confirmed signals that call for the move down to stall. There are daily bullish momentum divergence setups, but today’s decline to a new low dampened the odds that these bullish signals will be confirmed.
Nevertheless, since $3.00 has been held so far, this is still an area where a correction might occur. Should prices rise above $3.08, look for a test of $3.11 and possibly key near-term resistance at $3.16.
