Exploring Natural Gas Trends: Retracement, Support, and Future Price Movements

Natural Gas Forecast Video for 17.08.23 by Bruce Powers

Natural gas completed a 78.6% Fibonacci retracement today as it fell further to a low of 2.57. That led to an intraday bounce, yet natural gas looks like it will close relatively weak, in the lower half of the day’s range. It remains possible that lower targets will be reached as there is no indication yet that demand is improving.

Further Retracement Remains Possible

There are several lower target areas where support might be seen. The first is the completion of a descending ABCD pattern that starts from the recent swing high of 3.02. It shows a match between the declines in the CD leg and AB leg of the downtrend. Next in line is the completion of an 88.6% Fibonacci retracement at 2.52, followed by the uptrend line at the lower end of the parallel channel. The uptrend line is around 2.49 but the price represented by the line will change given the rising slope. Further, there is an internal uptrend line that can be watched in association with the other price levels noted above.

Daily Close Below April Low Risks Uptrend Structure

Certainly, a more significant decline to test previous support around the swing low of 2.46 from early-August is possible. That low is part of the uptrend price structure with a series of higher swing lows and higher swing highs that began off the April swing low. A daily close below the April low will be bearish and put the uptrend structure at risk of being broken. For now, the most likely scenario is for support and a bullish reversal to be seen before natural gas falls below the full uptrend line.

Following Retracement, a Period of Consolidation Wouldn’t be a Surprise

If the up-trending channel remains intact natural gas should proceed to evolve its uptrend towards new trend highs. It may or may not be successful. Given the more significant pullback than might be seen currently, it may take a little time till another rally attempt towards new highs. Once support is found for the current retracement, it wouldn’t be surprising to see a period of consolidation.

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