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 $3.572 and challenged the major trendline down from $5.396 and the 100-day moving average before pulling back and forming a daily long-legged doji. This candlestick pattern reflects near-term uncertainty and warns that a deeper test of support might occur before prices overcome the last major swing high at $3.585 and break above the trendline and the 100-day moving average. Even so, Monday’s breakaway gap, a daily bullish RSI divergence, and confirmed daily oversold signals strongly suggest that a bullish reversal is underway. Therefore, a deeper pullback will likely prove to be the corrective leg of a primary wave up from $2.893.

The outlook remains bullish, and overcoming $3.53 will call for a test of $3.60. This will overcome the $3.585 swing high, and a close above $3.60 will confirm a break above the trendline down from $5.396 and the 100-day moving average. This will also open the way for $3.65 and likely $3.74 in the coming days.

Nevertheless, there is a reasonable chance for a test of the $3.36 intermediate (1.382) target of the wave down from $3.572 and the equal to (1.00) target of the wave down from $3.553 first. Falling below $3.36 would call for a test of the 38 percent retracement of the rise from $2.893 at $3.31. A simple correction will hold $3.31. Settling below $3.31 would call for an extended correction to challenge $3.23 and possibly major support at $3.14. Closing below $3.14, the 62 percent retracement and smaller than (0.618) target of the wave down from $3.585, would imply that the move up has failed.

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.

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 stalled at $3.55, in line with the 89 percent retracement of the decline from $3.585, before plummeting to challenge the 50 percent retracement of the rise from $3.055 at $3.32 again. The $3.32 level held, but today’s close below the $3.37 smaller than (0.618) target of the wave down from $3.585 was bearish for the outlook in the coming days. This wave now favors a test of its $3.26 equal to (1.00) target. This is also the 62 percent retracement of the rise from $3.055. Settling below $3.26 will strongly imply that the corrective move up from $3.055 is complete, opening the way for $3.16 and lower.

Today’s bearish engulfing line already suggests that the corrective move up is complete and significantly dampens the odds for a continued rise in the coming days. Nonetheless, because $3.32 held, there is a modest chance for prices to recover. Resistance at $3.40, the 38 percent retracement from $3.550, is expected to hold. Key near-term resistance is the 62 percent retracement and the smaller than target of the wave up from $3.296 at $3.47. Closing above this will call for $3.57 and possibly a test of the $3.62 smaller than target of the primary wave up from $3.055.

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 rise, and a weekly bullish engulfing line and weekly bullish KaseCD divergence indicate that a reversal might be underway. The daily Kase Trend indicator flipped to bullish today and the 10-day DMI has shifted to neutral. It is still too soon to definitively state that a bottom has been made. However, the wave formation up from $2.738 calls for a test of $3.20. This is a highly confluent wave projection that is near the upper Bollinger Band. Closing above $3.11 will call for $3.17, which then connects to $3.20. Settling above $3.20 will provide more evidence that a bottom has been made and open the way for $3.26 and higher.

That said, today’s intraday bounce up from $3.037 held the 38 percent retracement of the decline from $3.131. Therefore, a deeper test of support might occur first. Taking out $3.02 would call for a test of key near-term support at $2.97. This level is in line with the 38 percent retracement of the rise from $2.738. A normal correction of the rise from $2.738 should hold $2.97. Settling below this would put the near-term odds in favor of a more significant test of support where the next major threshold is the 62 percent retracement at $2.89. Settling below $2.89 would imply that the move up from $2.738 is a completed correction of the long-term downtrend.

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 rise after confirming daily bullish RSI, Stochastic, and MACD divergences and overcoming the smaller than (0.618) target of the wave up from $2.738 on Tuesday. Today’s rise has positioned natural gas to challenge this wave’s $2.92 larger than (1.618) target. The move up is likely a correction, and a simple correction will hold $2.92. Closing above this will call for a more significant test of resistance in the coming days, with targets around the psychologically important $3.00 level.

That said, prices are pulling back and have taken out the 21 percent retracement of the rise from $2.738. A correction of the rise from $2.738 should hold the 38 percent retracement at $2.85. Falling below this will call for the key 62 percent retracement to be challenged. Closing below $2.81 will imply that the corrective move up from $2.738 is complete and put the near-term odds in favor of natural gas falling to challenge $2.76 and lower in the coming days.

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 retains a firm bearish outlook and is poised to reach targets at $2.73, $2.68, and $2.64 in the coming days. These are confluent projections of the waves down from $4.198, $3.657, and most recently, $3.148. The wave down from $3.148 projects to $2.73 as the equal to (1.00) target and connects to $2.64 as the intermediate (1.382) target. The $2.64 objective is a probable stalling point because this is also the equal to target of the largest wave down from $4.198. However, any move up will likely be a correction because the primary wave down from $5.21 calls for an eventual test of its $2.38 equal to target. This is also the equal to target of the wave down from $3.657 that projects to $2.68 as the smaller than (0.618) target.

That said, today’s morning star setup and the wave up from $2.764 warn that a correction might occur first. The wave up from $2.764 fulfilled its $2.84 smaller than target and projects to $2.88 as the equal to target. Therefore, there is a good chance for a test of at least $2.88 first. However, should prices take out the $2.791 swing low, this wave will be invalidated, opening the way for $2.73 and lower.

Nevertheless, overcoming $2.88 would call for the $2.91 completion point of the morning star to be challenged. A simple correction will likely hold $2.91 because this is also the intermediate target of the wave up from $2.764 and the 38 percent retracement from $3.148. Key resistance for the near-term outlook is $2.99. This is the confirmation point of the morning star reversal pattern and the 62 percent retracement from $3.148. Settling above $2.99 is currently doubtful but would reflect a bullish shift in near-term sentiment.

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.