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.
November natural gas fell to challenge a key area of support at $2.96. This level is split between the $2.98 equal to (1.00) target of the primary wave down from $5.396 and the $2.94 intermediate (1.382) and smaller than (0.618) target of the waves down from $4.573 and $4.122, respectively. Today’s decline stalled at $2.964 before prices rose and settled above $3.00. Today’s hammer and an oversold daily KaseCD momentum oscillator warn that another correction might occur. No bullish patterns or signals have been confirmed, so the outlook for tomorrow leans bearish. However, caution is warranted because this is an ideal spot for a correction.
Taking out $2.98 again will call for another attempt to test and close below $2.94. Settling below $2.94 will open the way for $2.90 and lower in the coming days. The next significant target below $2.94 is $2.75.
That said, the intraday wave up from $2.964 overcame its $3.022 smaller than target and should test at least the $3.06 equal to (1.00) target first. Overcoming $3.06 would call for a test of key near-term resistance at $3.10. Settling above $3.10 will confirm the daily hammer and likely a KCDpeak (oversold signal). In this case, look for a larger correction to challenge at least $3.20 before natural gas falls to a new low.
