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 the 21 percent retracement of the decline from $3.221 at $2.27 before stalling and pulling back for the past couple of days. The move down from $2.270 challenged but settled above the 62 percent retracement of the rise from $2.015 at $2.11 today.

This is a tight call for the near term because daily trend indicators remain bearish, the downtrend is intact, and the wave formation calls for a test of $1.97 and lower. However, daily bullish KaseCD and MACD divergences confirmed at the $2.015 swing low and the fact that $2.11 held on a closing basis warn that a larger test of resistance might still take place in the coming days.

Given the close above $2.11 was nominal, prices held the 38 percent retracement of the decline from $2.270 at $2.17, and natural gas is falling back toward $2.11 late this afternoon the near-term outlook leans bearish. A test of the $2.06 smaller than (0.618) target of the wave down from $2.270 is expected. Closing below this will call for a test of the $2.00 equal to (1.00) target and then the next major objective at $1.97.

That said, should prices rally again and overcome $2.17 look for a test of $2.21 and possibly key near-term resistance at $2.26. The $2.26 level is the smaller than target of the wave up from $2.015. Settling above $2.26 will call for natural gas to rise and test at least this wave’s $2.36 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.

Natural gas has continued to decline toward the psychologically important $2.00 level as called for. Today’s decline reflects a resurgence in bearish sentiment. The $2.03 larger than (1.618) target of the wave down from $2.448 held, but the larger and more important waves down from $3.590 and $3.221 call for a continued decline.

Tomorrow, look for a test of the $2.00 target of a confirmed $3.21 double top and likely the $1.97 XC (2.764) projection of the first wave down from $3.221. This is also the smaller than target of the wave down from $3.027. The $1.97 objective is a potential stalling point. However, any move will likely be a correction because the wave down from $3.590 favors an eventual test of its $1.84 equal to (1.00) target.

The daily Stochastic has been oversold for a few weeks and the RSI entered oversold territory today. A test of resistance will probably take place soon, but no bullish patterns or confirmed signals call for such a move. Even so, should prices rise before taking out $2.00 look for initial resistance at today’s $2.11 midpoint. Overcoming this would call for a test of key near-term resistance at today’s $2.18 open.

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 fell to test the $2.31 smaller than (0.618) target of the wave down from $2.448 as called for. This objective held, but most waves that meet the smaller than target extend to fulfill at least the equal to (1.00) target, in this case, $2.26. Therefore, the outlook for natural gas is bearish and a test of $2.26 is expected tomorrow. Closing below $2.26 will call for the $2.21 and $2.18 intermediate (1.382) and larger than (1.618) targets to be challenged in the coming days.

Because the $2.268 swing low held, the move up from that level might still prove to be a period of consolidation before a larger test of resistance takes place. Should natural gas overcome the 38 percent retracement from $2.448 at $2.35 early tomorrow look for a test of the $2.40 smaller than target of the wave up from $2.268. Overcoming this would call for key near-term resistance at $2.47 to be challenged. Settling above $2.47 would put the near-term odds in favor of testing $2.54 and $2.58.

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 has settled below the psychologically important $2.50 level for the past few days after confirming a double top that formed around $3.21. The double top’s target is $2.00, but it is doubtful that prices will fall this low. Prices also challenged the $2.41 larger than (1.618) target of the primary wave down from $3.221 today. This is a potential stalling point and the move down is due for a correction. However, there are no bullish patterns or signals that call for the move down to stall. Prices are also trading below all major daily moving averages, daily momentum is declining, and daily trend indicators are bearish. Therefore, the outlook remains bearish.

Tomorrow, look for a test of the $2.37 smaller than (0.618) of the wave down from $3.590. This is also a potential stalling point, so even though there are no bullish patterns or signals, there is still a reasonable chance for a correction soon. Closing below $2.37 will open the way for $2.32 and lower in the coming days.

Should prices rise before taking out $2.41 look for initial resistance at $2.48. Closing above this would call for a test of $2.52 and possibly key near-term resistance at $2.590. Settling above $2.590 would call for an extended correction where the next major threshold is the 38 percent retracement from $3.221 at $2.72.

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 settled below the crucial smaller than (0.618) target of the wave down from $3.161 and the 62 percent retracement of the rise from $2.518 at $2.76. This was quite bearish for the outlook because the move down now favors a test of the $2.52 equal to (1.00) target of the wave down from $3.161. This is also the confirmation point of a double top that formed around $3.16. Settling below the $2.70 smaller than target of the wave down from $3.159 will increase the odds for a test of $2.52 in the coming days.

There are no bullish patterns or signals that call for the move down to stall before reaching at least $2.70. Even so, should prices rise before taking out $2.70 look for today’s $2.82 midpoint to hold. Overcoming this will call for a test of key near-term resistance at $2.90.

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.

The outlook for natural gas in the coming weeks is bullish after settling above a crucial $3.08 resistance level on Tuesday. However, a double top has formed at $3.16 and today’s pullback shaped a daily bearish dark cloud cover candlestick reversal pattern. The $2.99 confirmation point of the dark cloud cover held, so the move down from $3.159 might be another short-lived correction. Nevertheless, the double top and dark cloud cover indicate a deeper test of support will probably take place during the next day or so before the move up extends.

Tomorrow, look for a test of $2.99, a move below which will call for $2.91. A simple correction should hold $2.91 because this is the larger than (1.618) target of the wave down from $3.159 and 38 percent retracement of the rise from $2.518. Settling below $2.91 would call for an extended correction to challenge $2.84 and possibly a key objective at $2.76.

That said, should prices rally back above $3.09 look for a test of $3.18. Settling above $3.18 would negate the $3.16 double top and today’s dark cloud cover. This would shift the near-term odds back in favor of natural gas rising to $3.23 and higher 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 may be consolidating into a range after testing and holding major support at $2.52 late last week. Prices have aggressively swung higher and lower for the past few days. These swings reflect near-term uncertainty. Thus the likelihood of a period of consolidation as traders await more information to definitively push prices higher or lower.

Nevertheless, today’s move up fulfilled the $2.77 smaller than (0.618) target of the wave up from $2.518. This level is also the 38 percent retracement of the decline from $3.161. The $2.77 level held on a closing basis, but most waves that meet the smaller than target extend to fulfill at least the equal to (1.00) target, in this case, $2.88. Therefore, during the next day or so odds favor a move above the 50 percent retracement of the decline from $3.161 at $2.84 to test at least $2.88.

That said, so far this week, each day that prices have been poised to rise or fall a move in the opposite direction has taken place the next day. Therefore, caution is warranted. Should prices fall again and take out $2.69 look for a test of the $2.63 smaller than target of the wave down from $2.829. Settling below this will put the near-term odds in favor of testing $2.59 and likely the $2.52 level 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.

July natural gas’ move down from $3.161 accelerated again today and settled below the 38 percent retracement of the rise from $2.128. This implies that the move down is more than just a simple profit-taking correction. A more significant test of support is now favored.

Tomorrow, look for a test of the 50 percent retracement and a confluent wave projection target around $2.64. Settling below this will call for a test of the $2.56 XC (2.764) projection of the largest wave down from $3.161. This is a potential stalling point. However, the waves down from $3.096 and $2.853 suggest that upon a close below $2.64 the move down could challenge $2.52 and $2.49 in the coming days. Settling below $2.52, which is also the 62 percent retracement of the rise from $2.128, is doubtful but would reflect a bearish shift in sentiment for the coming weeks.

The significance of the move down from $3.161 during the past few days suggests that the move up was overextended. There is little doubt that a long-term bottom has been made, so it now looks as though natural gas is looking to settle into a new trading range. Based on historical evidence, this range will most likely be between $2.50 and $3.00.

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 initially fell as called for in Tuesday’s update but held the equal to (1.00) target of the wave down from $2.798 before prices rallied again. The move up has been relentless for the past few weeks and is rising at an unsustainable rate. Furthermore, the wave formation up from $1.907 is overextended, daily momentum oscillators are overbought, and the move up is due for a correction.

The challenge is that there are no bearish patterns or confirmed signals that call for the move up to stall. Therefore, the near-term outlook remains bullish. Tomorrow, look for a test of the 62 percent retracement of the decline from $3.446 at $2.86. This is a point from which a correction should take place. Closing above $2.86 will call for $2.92 and another potential stalling point at $2.97, which is the 21 percent retracement of the decline from the $6.947 contract high.

That said, today’s $2.851 high might have been enough to fulfill the $2.86 objective, so caution is warranted. Prices pulled back from the $2.851 swing high late in the day and may test today’s $2.75 midpoint. Falling below this will call for a test of key near-term support and today’s open at $2.67. Settling below $2.67 would put near-term odds in favor of a more substantial test of support in the coming days where $2.49 is most important.

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 continued to rise as called for today. The move up negated Tuesday’s bearish Harami and tested the XC (2.764) projection of the subwave up from $1.907. Most importantly, prices settled above the $2.380 target of a rectangle that broke higher on May 6 and the last major swing high at $2.392. The move up is now poised to challenge targets around the psychologically and historically important $2.50 level in the coming days. Closing above the $2.43 smaller than (0.618) target of the wave up from $2.214 will clear the way for $2.48, $2.52, and eventually a test of the $2.55 XC (2.764) projection of the primary wave up from $1.907.

That said, the daily Stochastic is overbought and the daily RSI and KasePO are nearing overbought territory. No bearish patterns or confirmed signals call for a reversal, but these factors warn that a test of support might take place soon. Moreover, there is a small wave down from $2.423 that projects to $2.39 at the smaller than target. Falling below this will call for a test of $2.36 and possibly key near-term support at $2.32. Settling below $2.32 would not mean that the move up has failed but would put the near-term odds in favor of a deeper test of support where $2.23 is the next most important threshold.