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 settled below the $3.07 smaller than (0.618) target of the primary wave down from $5.210 today. This was a bearish decision point for the coming weeks and perhaps months because this wave now favors an eventual test of its $2.37 equal to (1.00) target. Prices must still contend with support at the psychologically important $3.00 level. Even so, the intraday wave down from $3.190 calls for a test of its $2.98 XC (2.734) projection. Closing below this will confirm a break of $3.00, opening the way for $2.95, $2.87, and $2.82 in the coming days.

There are no bullish patterns or confirmed signals that call for the move down to stall. There are daily bullish momentum divergence setups, but today’s decline to a new low dampened the odds that these bullish signals will be confirmed.

Nevertheless, since $3.00 has been held so far, this is still an area where a correction might occur. Should prices rise above $3.08, look for a test of $3.11 and possibly key near-term resistance at $3.16.

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 prices plummeted after the August contract tested and failed to close above the $3.57 completion point of a weekly morning star last week. The move down reflects renewed bearish sentiment, and prices settled below a longer-term bearish decision point at $3.08 today. The $3.08 objective is the smaller than (0.618) target of the primary wave down from $5.254 and connects to $2.37 as the equal to (1.00) target. Therefore, the outlook has become much more bearish for the coming weeks.

Tomorrow, look for a test of at least $3.03 and likely $3.00. Falling below $3.00, which may initially be a challenge given its psychological significance, will call for the $2.94 smaller than target of the primary wave down from $4.230. This is also the equal to (1.00) target of the first wave down from $4.230.

Nonetheless, the move down is due for a correction because the first intraday wave down from $3.629 is overextended. Daily momentum is nearing oversold territory and conditions are ripe for daily bullish divergences on a few momentum oscillators. Even so, there are no bullish patterns or confirmed signals that call for a correction. Should prices turn higher tomorrow and close above today’s $3.25 open, the near-term odds will shift in favor of testing the respective 50 and 62 percent retracement levels of the decline from $3.629 at $3.35 and $3.41.

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 rose to challenge a crucial objective at $3.57 today. This target is highly confluent, and, most importantly, is in line with the completion point of a weekly morning star setup, the equal to (1.00) target of the wave up from $3.149, and the 20-day moving average. Prices are rising toward $3.57 again late this afternoon. Natural gas is poised to overcome $3.57 to test at least $3.60 and likely $3.67 within the next day or so. Closing above these objectives will not only complete the weekly morning star but also open the way for a test of the reversal pattern’s $3.73 confirmation point. Settling above $3.73 will reflect rising bullish sentiment and indicate that a bullish reversal is underway.

The $3.57 target is a potential stalling point. Bearish KasePO and KaseCD divergences on the $0.025 Kase Bar chart warn that a deeper test of support might occur. However, there are no bearish signals on the daily chart, and the 21 percent retracement of the rise from $3.149 at $3.50 held. Taking out $3.50 would call for a test of key near-term support and the 38 percent retracement at $3.43. Settling below $3.43 will warn that the move up is failing and shift the near-term odds in favor of natural gas falling to challenge $3.37 and possibly the 62 percent retracement at $3.32.

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.

August natural gas broke through major support at $3.39 on Tuesday, but failed to close below that level. A daily hammer formed, and prices rose to test and hold the 21 percent retracement of the decline from $4.230 on Wednesday. Daily bullish MACD, RSI, and Stochastic divergences were also confirmed on Wednesday.

The outlook leans bearish, and closing below $3.39 will open the way for a test of the $3.25 smaller than (0.618) target of the wave down from $4.230. This wave connects to $2.92 as the equal to (1.00) target. Therefore, settling below $3.25 would call for a test of a longer-term bearish decision point at $3.08. This is the smaller than target of the wave down from $5.254 and connects to $2.39 as the equal to target.

Nevertheless, this is a tight call for the next few days. The failure to close below $3.39, the formation of a daily hammer, and the confirmation of daily bullish momentum oscillator divergences indicate that a reversal might occur. Prices will need to settle above $3.59 to complete the hammer and open the way for a test of the pattern’s $3.74 confirmation point. Settling above $3.74 would confirm a bullish reversal is underway.

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.

August natural gas continued to decline today and settled below the intermediate (1.382) target of the intraday wave down from $4.230 and the 78 percent retracement of the rise from $3.394. The August contract is poised to challenge the $3.54 larger than (1.618) target of the wave down from $4.230 early tomorrow. This is a potential stalling point. However, given the aggressive nature of the decline for the past few days, there is a good chance for a test of $3.50. This important objective sits just below the lower threshold of the range that prices had traded in for a few weeks between approximately $3.51 and $3.91. Closing below $3.50 will likely be a challenge without a test of resistance first, but would confirm a bearish outlook and open the way for $3.44 and likely $3.38 in the coming days.

The move down is due for a correction soon. The challenge is that there are no bullish patterns or signals that call for the move down to stall. Nonetheless, should prices rally before taking out $3.50 and close above key near-term resistance at $3.70, look for a test of $3.77 and $3.82. Holding $3.50 and settling above $3.82 would suggest that prices are settling back into a trading range.

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.

July natural gas is trading in a range between $3.44 and $3.84. Entering the week, prices had been poised to test the $3.84 confirmation point of a double bottom that formed around $3.44. However, prices have fallen back to test the lower threshold of the range during the past few days. The wave down from $3.840 calls for a test of its $3.41 equal to (1.00) target, which is also in line with the smaller than (0.618) target of the wave down from $4.125. The connection to $3.41 is made through a minor target at $3.45. Settling below $3.41 will confirm a break lower out of the range, opening the way for a test of the $3.303 swing low.

That said, today’s long-legged doji reflects uncertainty and warns that prices could remain bound within the range as traders wait for more information. Should prices rise within the range again and overcome $3.58, look for a test of $3.63 and possibly key near-term resistance at $3.69. Settling above $3.69, which is the smaller than target of the wave up from $3.437, would put the odds back in favor of July natural gas rising to challenge the top of the range at $3.84.

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 formed a double bottom around the $3.436 swing low late last week. Prices rallied on Monday and settled above the $3.69 smaller than (0.618) target of the wave up from $3.436 and the 62 percent retracement of the decline from $3.840. The wave up from $3.436 favors a test of its $3.84 equal (1.00) target. This is the confirmation point of the double bottom and is also in line with projections of a few subwaves up from $3.437 and the 62 percent retracement of the decline from $4.125. The connection to $3.84 is made through confluent targets at $3.74 and $3.79. Settling above $3.84 will confirm the double bottom, opening the way for a test of the $3.94 smaller than target of the wave up from $3.303. This wave connects to $4.25 as the equal to (1.00) target, which is also the target of the double bottom.

That said, July natural gas is struggling to settle above the 78 percent retracement of the decline from $3.840 and the 20-day moving average. Bearish hanging man candlesticks that formed Tuesday and Wednesday also warn that a test of support might occur first and that the move up may fail to reach $3.84 within the next few days. Taking out $3.65 would call for a test of $3.56 and possibly key near-term support at $3.51. Settling below $3.51, which is near the smaller than target of the wave down from $3.832, will shift the odds in favor of prices falling to negate the double bottom and challenge the $3.41 smaller than target of the wave down from $4.125 instead.

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.

June natural gas pulled back to test the 38 percent retracement of the rise from $3.098 at $3.35 after forming a bullish engulfing line on Tuesday. Today’s pullback is probably a correction of the rise from $3.098 but dampens the likelihood that the bullish engulfing line will lead to a reversal. Nevertheless, the near-term outlook remains bullish, and overcoming $3.41 will call for a test of $3.46. Settling above $3.46 will imply that the pullback from $3.513 is complete, opening the way for a test of $3.56 and then a bullish decision point for the coming weeks at $3.60.

That said, should the wave down from $3.513 take out its $3.31 smaller than (0.618) target, look for a test of the $3.25 equal to (1.00) target. The $3.25 level is key support for the near-term because this is also the 62 percent retracement of the rise from $3.098 and sits just below the $3.27 midpoint of the bullish engulfing line. Settling below $3.25 will imply that the move up from $3.098 is complete, shifting the near-term odds in favor of testing $3.18 and lower.

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 overcame the $3.648 corrective swing high of the prior primary wave down from $3.747 that had called for a test of $3.38. Prices settled just below the 62 percent retracement of the decline from $3.747, but the small wave up from $3.564 calls for a test of its $3.67 equal to (1.00) target. Overcoming $3.67 will clear the way for another attempt to settle above a highly confluent and key $3.72 objective. Closing above $3.72 will open the way for $3.81 and likely $3.90 in the coming days.

After rising to $3.656, prices settled into a small range that forms a coil. This pattern should break higher, but coils are not reliable continuation patterns. Taking out $3.56 will confirm a break lower out of the coil and call for a test of $3.50. The $3.50 level is expected to hold. Falling below this would call for a test of key near-term support and the smaller than (0.618) target of the new primary wave down from $3.747 at $3.46.

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.

June natural gas held major support at $3.02 on a closing basis and rallied on Monday. The move up confirmed daily bullish KaseCD and Stochastic divergences and challenged the 21 percent retracement of the decline from $5.069 at $3.44. Prices also settled above the 200-day moving average on Tuesday, but this level was taken out again on Wednesday. Even so, the pullback from $3.457 looks like a correction and held the equal to (1.00) target of the wave down from $3.457 and the 38 percent retracement of the rise from $3.007 around $3.28 on a closing basis today. The near-term outlook remains bullish, and overcoming $3.39 will call for another test of $3.44, a close above which will open the way for $3.53 and higher.

Nevertheless, the move up from $3.007 is still a simple correction, and today’s small decline dampens the odds for a continued rise. There is also a reasonable chance for another test of $3.28, given the $3.35 smaller than (0.618) target of the wave up from $3.260 held. Taking out $3.28 would call for a test of $3.22 and possibly key support at $3.18. The $3.18 threshold is the larger than (1.618) target of the wave down from $3.457 and the 62 percent retracement of the rise from $3.007. Settling below $3.18 would strongly imply that the move up from $3.007 is complete and put the odds in favor of natural gas falling to challenge $3.02 again.