Natural Gas Technical Analysis and Near-Term Outlook

Natural gas retains a firm bearish outlook even after today’s somewhat surprising bounce. The move up stalled near the 38 percent retracement of the decline from $2.688 and could not overcome the $2.568 intra-day swing high. This suggests the move up is another correction after breaking lower out of the bearish flag pattern Monday. The move down is poised to challenge $2.46 again, a close below which will call for the next major objective and a potential stalling point at $2.40. Nevertheless, as stated in yesterday’s daily update, an eventual close below $2.40 is expected, which will clear the way for $2.33 and lower.

With that said, today’s move up dampens near-term odds for a continued decline during the next few days. Moreover, should natural gas overcome today’s $2.546 high early tomorrow look for a test of $2.59. This has become a highly confluent resistance level and is in line with the breakout point of the flag. It is common to see a pullback to challenge the breakout point of this type of pattern. Closing above $2.59 is doubtful, but such a move would reflect a bullish shift in near-term sentiment and call for $2.64 and possibly a move back toward crucial upper resistance at $2.69 again.

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 Technical Analysis and Near-Term Outlook

Natural gas retains a bearish outlook. The move up from $2.459 tested and held $2.69 resistance, which has helped to shape a bearish flag. This is a continuation pattern that is expected to break lower. The bottom trend line around $2.57 held today, but a close below this will confirm a break lower out of the flag and clear the way for $2.51. This then connects to $2.45 and lower.

Nevertheless, because $2.57 held today, there is a modest chance for another oscillation within the flag to test the upper trend line again. This is doubtful but a move above $2.65 will call for a test of $2.69 again. Settling above $2.69 would call for $2.73 and possibly $2.76, which would likely be in line with the flag’s upper trend line by the time prices rose that high.

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 Technical Analysis and Near-Term Outlook

Not a lot changed for natural gas today. The move down is hesitant to definitively take out $2.50. However, the waves and subwaves down from $3.06 still favor a continued decline to $2.40 and possibly $2.30. Taking out $2.50 will clear the way for $2.45 and then $2.40 during the next few days.

With that said, $2.50 is in line with the 50 percent retracement of the rise from $2.422 and held on a closing basis today. Also, today’s doji dampens near-term odds for a continued decline. Should natural gas overcome $2.56 early tomorrow look for a test of key near-term resistance at $2.61. Settling above $2.61 will call for a larger correction to challenge $2.67 before the decline continues as expected.

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 Technical Analysis and Near-Term Outlook

The long-term outlook for natural gas is bearish. However, the move down is struggling to definitively take out major support around $2.52. Monday’s close below $2.52 was negative and implies that prices will eventually fall to $2.39 and possibly $2.30.

Nevertheless, $2.52 has been held on a closing basis for the past two days, and the newly formed wave up from $2.478 met its $2.54 smaller than (0.618) target this afternoon. Therefore, it looks as though natural gas will try to rise to $2.59 first. This will fill Monday’s gap down, fulfill the equal to (1.00) target of the wave up from $2.478, and test the 21 percent retracement of the decline from $3.06.

Closing above $2.59 is unlikely but would call for $2.63 and possibly $2.70. The $2.70 level is most important because it is the 38 percent retracement of the decline from $3.06 and the 200-day moving average. Settling above $2.70 is highly doubtful without a surprise bullish shift in external factors (e.g., weather, storage, etc.).

Once $2.59 is met another test of support is anticipated. Moreover, a close below $2.49 before or after $2.59 is challenged will clear the way for $2.44 and then the next major thresholds at $2.39 and $2.30.

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 Technical Analysis and Near-Term Outlook

Natural gas continues to struggle to take out $2.62 and test the 62 percent retracement of the rise from $2.308 at $2.60. However, because the primary wave down from $3.06 has taken out its $2.66 smaller than (0.618) target, odds still favor an eventual decline to the $2.53 equal to (1.00) target. Falling below $2.65 before prices rise much higher will clear the way for a test of $2.60 and then $2.52 in the coming days.

With that said, today’s move up from $2.615 has challenged first resistance around $2.70, and there is a good chance for a test of $2.74 and even $2.79 tomorrow. Resistance at $2.74 is in line with the 10-, 50-, and 100-day moving averages and could prove to be a stalling point for the upward correction. However, $2.79 is more important. This is the 38 percent retracement of the decline from $3.06 and must hold for the near-term outlook to remain bearish.

Settling above $2.79 would not mean the move down is over. However, this would call for a test of $2.84 and possibly $2.89. The $2.89 level is the 62 percent retracement of the decline from $3.06 and is in line with the $2.887 swing high. Overcoming this would invalidate the primary wave down from $3.06 that projects to $2.53. Closing above $2.89 is currently doubtful but would reflect a bullish shift in external factors and call for a push toward $3.00 again.

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 Technical Analysis and Near-Term Outlook

Natural gas briefly rose above the $2.88 target but stalled at $2.887. The subsequent move down has taken out Tuesday’s midpoint and is poised to challenge $2.77. This is the 62 percent retracement of the rise from $2.697. Closing below $2.77 will strongly imply that the corrective move up from $2.697 is complete. Settling below $2.72 will confirm this and clear the way for the next major target at $2.68.

Nevertheless, should natural gas rally above $2.86 early tomorrow look for another attempt at $2.92. This level is still expected to hold. Closing above $2.92 will shift near-term odds in favor of challenging $2.99 and possibly $3.04 again.

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 Technical Analysis and Near-Term Outlook

Natural gas fell again today as expected and settled below the $2.80 target called for in Tuesday’s update and the 20-day moving average. The decline from $3.06 is now poised to test a crucial target at $2.76. This is the larger than (1.618) target of the primary wave down from $3.06 and is split between the 38 percent retracement of the rise from $2.308 and the 100-day moving average. This might prove to be stingy near-term support, especially in the case that tomorrow’s reported withdrawal is larger than expected. Nevertheless, the charts can only tell us what the market currently knows about itself. Based on this week’s decline, it looks as though the market is shaking off last week’s cold snap. Therefore, upon a close below $2.77 look for $2.69 and $2.60.

That said, caution is still warranted because a miss in either direction by consensus expectations for tomorrow’s storage report could quickly drive prices much higher or lower. At this point, there is probably more upside risk than downside too. Therefore, should natural gas overcome $2.89 look for a test of key near-term resistance at $2.96. Closing above this would reflect renewed bullish sentiment and warn that the move down might be complete. Closing above $3.03 would confirm this and clear the way for $3.08 and higher. Keep in mind that April’s primary wave up from the $2.07 contract low still favors an eventual rise to fulfill its $3.29 equal to (1.00) target, which is also the larger than target of the initial wave up from $2.308.

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 Technical Analysis and Near-Term Outlook

Natural gas rose as expected again today and has nearly fulfilled a crucial target and bullish decision point at $3.34. This is the larger than (1.618) target of the primary wave up from $2.268. It is also in line with the target of a rectangle pattern that prices broke higher out of yesterday. Normally, a pullback would be expected before overcoming the larger than target of such an important wave. However, external factors are quite extraordinary right now, so it would not be surprising to see prices overcome $3.34 during the next few days.

A sustained close above $3.34 will clear the way for $3.39, $3.45, and $3.55. However, it is important to note that given continue bullish sentiment from external factors (e.g., weather), there is potential for prices to rise to $3.99 and even $4.43. It is premature to call for such a move, but these are the XC (2.764) and trend terminus of the primary wave up from $2.268, respectively.

The daily RSI and Stochastic are overbought but can remain that way for an extended period during random events. Otherwise, there are no patterns or setups that call for the move up to stall other than the importance of resistance at $3.34. Even so, should natural gas take out $3.16 early tomorrow look for a test of key near-term support at $3.10. Settling below this would reflect a bearish shift in near-term sentiment and call for a test of $3.01 and possibly lower.

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 Technical Analysis and Near-Term Outlook

Natural gas briefly fell below $2.77 support before rallying above the 62 percent retracement of the decline from $3.057. The move up is poised to challenge the crucial $2.99 objective again early tomorrow. Based on today’s rise, odds favor a move above $2.99 and a test of $3.06. Settling above $3.06 will clear the way for $3.13 and likely $3.20 in the coming days.

There is little technical evidence that suggests the move up will stall again at $2.99. Even so, this has been a resilient threshold. Should $2.99 hold and prices begin to pullback again look for support at $2.89 and $2.83. Falling below $2.83 would imply that a head and shoulders pattern has formed. It is doubtful that this pattern will take shape, but such a move would reflect a bearish shift in external factors (e.g., weather) and sentiment. Closing below $2.78, the smaller than (0.618) target of the newly formed wave down from $3.057, would call for the $2.73 neckline of the head and shoulders to be broken and for prices to fall toward $2.65 and likely lower.

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 Technical Analysis and Near-Term Outlook

Natural gas fell as called for and settled just below Monday’s $2.79 midpoint. This completed yesterday’s shooting star and calls for a deeper test of support. Tomorrow, look for the evening star’s $2.73 confirmation point to be challenged. Additionally, the waves and subwaves down from $3.005 favor a decline to $2.69. For the move up to retain a reasonable chance of extending again during the next few days, $2.69 must hold. Closing below this will call for $2.63 and possibly $2.56, the lower of which is an area where Monday’s gap up would be filled.

That said, the late move down from $2.839 held the $2.748 swing low and formed a small up wave. Should natural gas overcome $2.82 in early trading tomorrow look for a test of this wave’s $2.85 equal to (1.00) target. This is also the 38 percent retracement of the decline from $3.005. Rising above $2.85 will call for $2.91, the larger than (1.618) target and 62 percent retracement. Settling above $2.91 would dampen odds for a deeper test of support and call for $2.99, the barrier to a renewed bullish 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.