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 rose to test and hold the 89 percent retracement of the decline from $2.945 at $2.93 before pulling back to challenge the 62 percent retracement of the rise from $2.804 and the smaller than (0.618) target of the wave down from $2.945 at $2.840 today.

Testing $2.84 warns that a deeper test of support might occur tomorrow. However, the prior swing lows that formed during the rise from $2.592 have been held, and the primary wave up from $2.592 still favors a test of its $2.97 equal to (1.00) target. This is the most confluent objective on the charts because it is also a projection of the waves up from $2.676, $2.735, and $2.804. Therefore, the near-term outlook continues to lean bullish. Overcoming $2.89 will call for a test of the $2.92 smaller than (0.618) target of the wave up from $2.804, which then connects to $2.97 as the equal to target. Settling above $2.970 will likely be a challenge given its confluence, but this would open the way for $3.01 and higher.

Nevertheless, natural gas settled just above $2.84, and the bounce since falling to $2.845 has been minimal. Therefore, there is a reasonable chance for prices to fall below $2.84 early tomorrow. This would call for another attempt to take out the 38 percent retracement of the rise from $2.592 at $2.81 to reach the 50 percent retracement and the equal to target of the wave down from $2.945 at $2.78. Taking out $2.78 would call for key support at $2.73 to be challenged. This level is key because it is the intermediate (1.382) target of the wave down from $2.945, the 62 percent retracement of the rise from $2.592, and is in line with the last major swing low of the rise from $2.592 at $2.735. Settling below $2.73 would imply that the move up from $2.592 is complete.

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 took out the $2.746 swing low and invalidated all the prior waves up from $2.592 that had called for a continued rise. The 62 percent retracement of the rise from $2.592 at $2.70 and the $2.69 smaller than (0.618) target of the wave down from $2.905 held on a closing basis. Another test of $2.69 is favored, a close below which will imply that the corrective move up from $2.592 is complete. This will open the way for the $2.66 smaller than (0.618) target of the wave down from $2.868. This wave connects to $2.58 as the equal to (1.00) target. This is also the equal to target of the wave down from $2.905. Therefore, settling below $2.69 and then $2.66 will clear the way for a move below the confluent $2.62 target that was tested and held on a closing basis when prices fell to $2.592.

Nevertheless, because $2.69 held on a closing basis, there is still a modest chance for a continued rise. However, prices would have to close above $2.81 to put the near-term odds in favor of testing the $2.870 smaller than (0.618) target of the new primary wave up from $2.592. Settling above $2.87 will call for a test of this wave’s $2.98 equal to target.

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.

February natural gas rose today, confirming daily bullish KasePO, RSI, Stochastic, and MACD divergences. These bullish momentum signals reflect exhaustion and call for a larger test of resistance before the downtrend extends and tests a highly confluent area of support between $3.30 and $3.20.

The intraday wave up from $3.324 met and held its $3.59 smaller than (0.618) target. Another test of $3.59 is expected, a move above which will call for the $3.67 equal to (1.00) target to be fulfilled. This is also the 38 percent retracement of the decline from $4.176. A simple correction will hold $3.67. Settling above $3.67 will call for an extended correction to challenge $3.77 and possibly $3.83. Settling above $3.83, which is in line with the larger than (1.618) target of the wave up from $3.324 and the 62 percent retracement from $4.176, would indicate that a substantial test of resistance is underway.

Nonetheless, the downtrend remains intact, and the top of Monday’s gap down from $3.563 held on a closing basis. The gap might still prove to be an exhaustion pattern should prices settle above the $3.59 target. Otherwise, should $3.59 hold, and prices close below $3.43, look for another attempt to take out key near-term support at $3.30. This is the smaller than (0.618) target of the first wave down from $3.324 and the intermediate (1.382) target of the first wave down from $5.551. Settling below $3.30 would put the odds in favor of testing the $3.20 equal to target of the primary wave down from $5.551. This is another probable stalling point for the February natural gas contract.

Natural Gas Technical Analysis and Near-Term Outlook

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Natural gas briefly broke the trendline up from $3.913 and fell to challenge the 62 percent retracement of the rise from $3.913, the 89 percent retracement from $4.390, and the 50-day moving average at $4.51. Both the trendline and the $4.51 target held on a closing basis. The outlook remains bearish because no bullish patterns or signals have been confirmed. Closing below $4.51 will suggest that the move up from $3.913 is complete. In this case, look for a test of $4.38. Falling to $4.38 will take out the last major swing low at $4.390. This would be the last factor in confirming that the trend up from $3.913 has been broken.

That said, the move down from $5.496 lacks a clear primary wave. This is an ideal stalling point given the importance of the trendline and the $4.51 target. Today’s spinning top candlestick pattern reflects near-term uncertainty and warns that a correction might occur tomorrow. Overcoming the $4.69 smaller than (0.618) target of the wave up from $4.455 would call for a test of $4.78 and possibly key near-term resistance at $4.86. Settling above $4.86 would confirm the spinning top and put prices above the 38 percent retracement of the decline from $5.496. This would reflect a bullish shift in near-term sentiment and suggest that the uptrend still has a modest chance of extending.

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.

January natural gas fell to challenge the equal to (1.00) target of the wave down from $4.881, the 50 percent retracement of the rise from $3.913, the 100-day moving average, and the trend line up from $3.913, all around $4.39 today. The decline to $4.39 negated the potential for a five-wave trend up from $3.913 because the top of the potential Wave I at $4.412 was broken by the decline to $4.386. The move up might still form a nested three-wave trend, but the odds for a continued rise within the next couple of weeks have been significantly dampened.

The near-term outlook is bearish, and taking out $4.44 will call for another test of $4.39. Settling below $4.39 will strongly suggest that a reversal is underway. This will also clear the way for a minor target at $4.34, a test of the 62 percent retracement of the rise from $3.913 at $4.28, and the $4.23 intermediate (1.382) target of the wave down from $4.881 in the coming days.

Nevertheless, the $4.39 target is a probable stalling point given its confluence and importance. Short-term daily trend indicators are neutral, and the rise from $4.386 settled marginally above the $4.48 target of a confirmed intraday triple top around $4.80. There is a reasonable chance for a test of today’s $4.57 midpoint. This is also the 38 percent retracement from $4.881 and the 20-day moving average. Overcoming $4.57 would call for a test of key near-term resistance at $4.64, which is today’s open and the 50 percent retracement. Settling above $4.57 would suggest that the pullback from $4.881 is a completed correction. Even so, January natural gas must ultimately settle above the $4.86 larger than (1.618) target of the first wave up from $3.913 to prove that the uptrend is still intact.

Natural Gas Technical Analysis and Near-Term Outlook

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Natural gas held important near-term support at $4.27 on a closing basis Tuesday. Today’s rise confirmed Tuesday’s hammer by settling above Monday’s open. The corrective pullback from $4.688 is likely complete, and the move up is now poised to challenge the $4.63 larger than (1.618) target of the wave up from $3.595 again. Settling back above $4.63 will call for another attempt to settle above the 50 percent retracement of the decline from $5.757 at $4.68. Closing above $4.68 will indicate that Wave V of a potential five-wave trend up from $3.595 is underway. In this case, look for a test of a minor target at $4.73 and then the $4.81 smaller than (0.618) target of Wave III up from $3.752 in the coming days.

There are no bullish patterns or signals that call for the move up to stall again tomorrow. Nonetheless, should prices fall, look for initial support at $4.46 and $4.38. Key support for the near-term is the $4.32 smaller than target of the wave down from $4.688. Settling below $4.32 would call for another test of $4.27 and likely an extended test of support, where $4.14 is the next major threshold. Taking out $4.14 would negate the potential for a five-wave trend up from $3.595.

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.

December natural gas fell as called for and challenged the 62 percent retracement of the rise from $3.595 at $3.80, the $3.76 smaller than (0.618) target of the wave down from $4.211, and the bottom of the October 20 breakaway gap up from $3.748. These important targets were held on a closing basis, and a daily morning star formed.

The bounce from $3.752 initially looked promising for bulls, but the late decline below $3.80 suggests that $3.76 will be challenged again early tomorrow. Closing below $3.76 will strongly suggest that the move up from $3.595 is complete and call for another attempt to settle below the $3.62 equal to (1.00) target of the primary wave down from $5.757.

Nevertheless, this is a tight call for tomorrow because the area between $3.76 and $3.80 is extremely important. Most of the waves and sub-waves down from $4.139 project to levels between $3.76 and $3.80. This is a prime area for the move down to stall, and $3.76 is the target that December natural gas must hold for the move up from $3.595 to retain a reasonable chance at extending. Closing above $3.96 will overcome the larger than (1.618) target of the current wave up from $3.752 and confirm the morning star. This would suggest that the pullback from $4.139 is complete and call for a push to challenge a key threshold at $4.09. This is the XC (2.764) projection of the wave up from $3.752 and, more importantly, the smaller than target of the wave up from $3.595.

Natural Gas Technical Analysis and Near-Term Outlook

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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.