Natural Gas Price Forecast – May 22, 2024

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 initially fell as called for in Tuesday’s update but held the equal to (1.00) target of the wave down from $2.798 before prices rallied again. The move up has been relentless for the past few weeks and is rising at an unsustainable rate. Furthermore, the wave formation up from $1.907 is overextended, daily momentum oscillators are overbought, and the move up is due for a correction.

The challenge is that there are no bearish patterns or confirmed signals that call for the move up to stall. Therefore, the near-term outlook remains bullish. Tomorrow, look for a test of the 62 percent retracement of the decline from $3.446 at $2.86. This is a point from which a correction should take place. Closing above $2.86 will call for $2.92 and another potential stalling point at $2.97, which is the 21 percent retracement of the decline from the $6.947 contract high.

That said, today’s $2.851 high might have been enough to fulfill the $2.86 objective, so caution is warranted. Prices pulled back from the $2.851 swing high late in the day and may test today’s $2.75 midpoint. Falling below this will call for a test of key near-term support and today’s open at $2.67. Settling below $2.67 would put near-term odds in favor of a more substantial test of support in the coming days where $2.49 is most important.

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.