Natural Gas Price Forecast – September 2, 2020

Natural Gas Near-Term Outlook

Natural gas confirmed an intra-day head and shoulders reversal pattern by settling below $2.50 today. The pattern’s target is $2.26, which is also in line with the larger than (1.618) target of the primary wave down from $2.743. The connection to $2.26 is made through $2.42 and $2.34. The $2.34 objective is crucial because this is the most confluent target on the chart and is the 38 percent retracement of the rise from $1.700.

Natural Gas - Head and Shoulders on $0.025 Kase Bar Chart
Natural Gas – Head and Shoulders on $0.025 Kase Bar Chart

For the five-wave move up from $1.700 to have any chance at extending again and reaching its $2.81 objective $2.34 must hold. At this point, holding $2.34 for more than a day or two is doubtful. It now looks as though the five-wave trend has ended and that a large three-wave correction is underway. Settling below $2.34 will confirm this.

The move down has been somewhat choppy for the past few days. This suggests the decline is corrective. Even so, resistance at $2.57 is expected to hold as the move down extends. Key near-term resistance is $2.63. This is the 62 percent retracement of the decline from $2.743, a close above which would call for a test of $2.68 and then $2.73. Settling above $2.73 would clear the way for a push to challenge $2.81.

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.

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.

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