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.

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 has settled below the crucial $3.04 target for the past three days. The sustained close below $3.04 is bearish for the outlook because the wave formation down from $4.946 now calls for a test of at least $2.91 and likely the next major objective at $2.83. The decline to $2.955 also took out an important $2.990 swing low on the continuation chart. This negated a five-wave pattern up from the $1.481 swing low and dampened the longer-term odds for a continued rise.

That said, the psychologically important $3.00 level has held on a closing basis, and today’s inside day reflects near-term uncertainty. Any move up will likely be a correction. Even so, settling above key near-term resistance at $3.21 will shift the near-term odds in favor of a larger correction to challenge $3.29 and possibly $3.37.

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 continued to decline but is struggling to settle below the 200-day moving average at $3.21. Even so, today’s move down negated Tuesday’s hammer, and the primary wave down from $4.946 favors a test of its $3.04 intermediate (1.382) target. Therefore, the outlook remains bearish. The connection to $3.04 is made through a confluent but structurally minor target at $3.14. The $3.04 objective is a key target and probable stalling point for both the May contract and the continuation chart. Once $3.04 is met, a test of resistance is anticipated.

There are no bullish patterns or signals that call for a reversal. Even so, should the 200-day moving average continue to hold and prices overcome $3.32, look for a test of $3.38 and possibly key near-term resistance at $3.44.

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.

May natural gas initially fell below the crucial $3.40 equal to (1.00) target of the primary wave down from $4.946. The move down stalled at $3.336, which was just above the $3.31 larger than (1.618) target of the wave down from $4.322 and the XC (2.764) projection of the wave down from $4.253. The subsequent move up recaptured the 100-day moving average, settled above Tuesday’s open, and confirmed daily bullish MACD and Stochastic divergences. Therefore, a bullish reversal might be underway.

The intra-day wave formation up from $3.336 calls for a test of $3.89. This is the highest that the first wave up from $3.336 projects and is in line with the 62 percent retracement of the decline from $4.253. Overcoming this will call for the 38 percent retracement of the decline from $4.946 at $3.95 to be tested. Settling above $3.95 will imply that the move up is more than just a simple correction, clearing the way for $4.05 and possibly $4.15 to be challenged in the coming days.

Nevertheless, Monday’s open held on a closing basis and the wave formation up from $3.336 is due for a correction before overcoming $3.89. Should prices turn lower early tomorrow look for initial support at $3.64 and then $3.52. The $3.52 level is expected to hold. Falling below this would call for another attempt to settle below key support at $3.40.

Natural Gas Technical Analysis and Near-Term Outlook

May natural gas broke through support at $4.05 late last week and has continued to grind its way lower for the past few days. Prices are struggling to close below the 50-day moving average at $3.85. Even so, the wave formation calls for a test of the $3.76 smaller than (0.618) target of the primary wave down from $4.946. This is also the 50 percent retracement of the rise from $2.595. The $3.76 target is a decision point. Settling below $3.76 will open the way for the eventual fulfillment of this wave’s $3.40 equal to (1.00) target, with a test of the crucial 62 percent retracement at $3.49 along the way.

Daily momentum is working it was lower too and the 10-day DMI had a bearish crossover on Tuesday. The ADX is below 25 and declining though, so there is currently not a trend reflected by these indicators on the daily chart. There are no bullish patterns or signals that call for the move down to stall before reaching $3.76, but support around the 50-day moving average has been resilient for the past two days. Should May natural gas rally and overcome $3.96 look for a test of $4.02 and possibly key near-term resistance at $4.07.

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.

April natural gas rose today after holding the 38 percent retracement of the rise from $2.501 at $3.98 for four straight days. A triple bottom formed around $3.96 and was confirmed by today’s close above the $4.218 swing high. Prices also settled above the 21 percent retracement of the decline from $4.901 and the 20-day moving average.

The move up might still prove to be a correction of the decline from $4.901 but is poised to extend to at least $4.34 tomorrow. Closing above this will call for $4.42, a test of the $4.50 target of the triple bottom, and possibly another attempt to settle above a key target at $4.56 on both the April and continuation charts.

Prices are pulling back from the $4.259 swing high late this afternoon so a test of the 38 percent retracement of the rise from $3.955 at $4.14 might occur first. Settling below this will warn that the move up is failing and call for a test of the 62 percent retracement at $4.07. Closing below $4.07 will imply that the move up from $3.955 is complete. However, at this point, April natural gas must settle below $3.98 to put the odds firmly back in favor of a deeper test of support.