Higher Targets for Natural Gas as Uptrend Remains Intact

Natural Gas Forecast Video for 28.04.23 by Bruce Powers

Natural gas short-term advance off the 2.14 swing low from five days ago is holding. This follows a failed breakout to new trend highs yesterday, with resistance seen at 2.41. That high is now the top of the trend. The developing uptrend remains intact and pointing higher. A daily close above that high of 2.41 will provide the next bullish signal.

Weekly Uptrend in Place

A developing uptrend in natural gas is not only apparent in the daily chart but also the weekly chart. If little changes before the weekend, natural gas will complete the period with a series of higher weekly highs and higher weekly lows. This is bullish behavior. Yet, further confirmation of strength is needed to indicate it has a chance to keep going.

Given the aggressive run off the first bottom in February, natural gas has the potential to take off once it gets going off the bottom. That rally was 53.9% in only seven days. Although we may not see a similar quick rally, the potential for aggressive price action a large advance exists.

Room on the Upside

The next higher target zone for natural gas is a price range from around 2.58 to 2.62. That zone consists of the completion of an ABCD pattern or zig zag and the 61.8% Fibonacci retracement, respectively. The completion of the ABCD pattern would reflect symmetry between the AB leg and CD leg. However, the pattern also has higher targets derived from Fibonacci projections. Those price target areas are confirmed by either another Fibonacci level or prior resistance or support on a weekly basis. The projections are based on 127.2% and 161.8% Fibonacci ratios.

Downside Possible?

Certainly, an upside move could fail with natural gas heading down instead of up. A drop below this week’s low of 2.17 will indicate weakening but a daily close below is needed to confirm. Natural gas remains within an evolving expanding triangle bottom. It is possible that it goes to the bottom trendline of the pattern and reverses higher from there. This is a possibility and needs to be considered should natural gas start to decline. Prior support is at the first low of 1.97, and then the second low of 1.95 from three weeks ago.

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