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 held important near-term support at $4.27 on a closing basis Tuesday. Today’s rise confirmed Tuesday’s hammer by settling above Monday’s open. The corrective pullback from $4.688 is likely complete, and the move up is now poised to challenge the $4.63 larger than (1.618) target of the wave up from $3.595 again. Settling back above $4.63 will call for another attempt to settle above the 50 percent retracement of the decline from $5.757 at $4.68. Closing above $4.68 will indicate that Wave V of a potential five-wave trend up from $3.595 is underway. In this case, look for a test of a minor target at $4.73 and then the $4.81 smaller than (0.618) target of Wave III up from $3.752 in the coming days.
There are no bullish patterns or signals that call for the move up to stall again tomorrow. Nonetheless, should prices fall, look for initial support at $4.46 and $4.38. Key support for the near-term is the $4.32 smaller than target of the wave down from $4.688. Settling below $4.32 would call for another test of $4.27 and likely an extended test of support, where $4.14 is the next major threshold. Taking out $4.14 would negate the potential for a five-wave trend up from $3.595.
