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.
June natural gas pulled back to test the 38 percent retracement of the rise from $3.098 at $3.35 after forming a bullish engulfing line on Tuesday. Today’s pullback is probably a correction of the rise from $3.098 but dampens the likelihood that the bullish engulfing line will lead to a reversal. Nevertheless, the near-term outlook remains bullish, and overcoming $3.41 will call for a test of $3.46. Settling above $3.46 will imply that the pullback from $3.513 is complete, opening the way for a test of $3.56 and then a bullish decision point for the coming weeks at $3.60.
That said, should the wave down from $3.513 take out its $3.31 smaller than (0.618) target, look for a test of the $3.25 equal to (1.00) target. The $3.25 level is key support for the near-term because this is also the 62 percent retracement of the rise from $3.098 and sits just below the $3.27 midpoint of the bullish engulfing line. Settling below $3.25 will imply that the move up from $3.098 is complete, shifting the near-term odds in favor of testing $3.18 and lower.
