Natural Gas: A Bullish Surge, but Is a Reversal Looming?

Natural Gas Forecast Video for 10.10.23 by Bruce Powers

Natural gas triggers a bullish trend continuation signal as it exceeds the prior trend high of 3.36 to reach a new trend high of 3.47. Subsequently, resistance was encountered leading to a reversal lower. At that high silver was up by 36% from the most recent swing low on September 26 and it had reached its most overbought level on the RSI oscillator since April 2022. Where natural gas closes relative to today’s price range will provide clues to what might be coming next.

Weak Close and Bearish Daily Candle Likely

Currently, natural gas is on track to close weak, in the lower half of the day’s range and possibly lower. The halfway point for today’s range of 3.47 to 3.32 is 3.40. Further, given late session weakness, today may complete a bearish inverted hammer candlestick pattern. It shows buyers dominating earlier in the session, but they could not maintain strength against selling pressure, and by the end of the session sellers were dominating. That may carry over into Tuesday’s session leading to a possible bearish continuation of today’s intraday weakness.

Drop Below 3.32 Signals Retracement

If natural gas does close weak, in the lower half of the day’s range, then a decisive drop below today’s low of 3.32 triggers a bearish reversal. That would also put natural gas back within the range identified by the rising parallel trend channel on the chart. The 200-Day EMA was exceeded to the upside Friday. It becomes the first area to watch for possible support. The 200-Day line represented resistance since December of last year, and now should indicate an area of support.

Prior Trend Resistance Should See Support

Further, the long-term downtrend line that is begun from the August 2022 trend high was broken to the upside last week as well. It marked dynamic resistance until last week. During a retracement is should act as support if natural gas dips that low. The price represented by the line will vary according to the date reached, but the 61.8% Fibonacci retracement completes at 2.91, and it can be used as a guide.

The above short-term bearish scenario is negated upon a rise above today’s high of 3.47.

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