Short-Term Natural Gas Forecast – February 28, 2018

The outlook for April natural gas remains negative. Prices are still oscillating within the upward sloping bearish flag, but today’s failure to test the top of the flag’s range at $2.73 indicates the formation should attempt to break lower tomorrow.

The flag’s lower trend line is nominally $2.64, but $2.63 is key because it is the 62 percent retracement of the move up from $2.565. It is also in line with the $2.633 swing low. A close below $2.63 will confirm the flag has broken lower and open the way for another test of $2.52, the gateway to a much more bearish long-term outlook.

April Natural Gas - Daily
April Natural Gas – Daily

Resistance at $2.73 should hold. This is near the top of the flag, the 50-day moving average, and the 38 percent retracement of the decline from $2.983. A close above this would call for a larger upward correction that could ultimately reach $2.84.

The $2.84 threshold is most important because it is split between the 62 percent retracement and the 200-day moving average. It is doubtful that prices will overcome (or even reach) $2.84 without significant help from external factors.

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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