Natural Gas Consolidates after Retracement Breakout, Higher Targets Ahead

Natural Gas Forecast Video for 27.07.23 by Bruce Powers

Natural gas pulls back lower as it fails to progress to get above the 100-Day EMA. That is where resistance has been seen for the past five days. Again, today the 100-Day line was tested as resistance, and it worked. Notice that the three previous days each advanced above the line but on all the days but the first it was unable to close above the line. Today’s high of 2.74 was an exact test of the line as resistance, which is at 2.74.

Completes 50% Retracement

Today’s pullback found support around a low of 2.63 and completed a 50% retracement at 2.64. Despite today’s weakness following a retracement breakout last week natural gas has continued to trade within the high to low range of last Thursday. Support from Thursday is at the day’s low of 2.62. A little further down is the 61.8% Fibonacci retracement at 2.60, followed by the 34-Day EMA at 2.59.

Further Consolidation is Better Prep for Upside Breakout

Continued consolidation and retracement following last week’s high of 2.79 can be healthy and better prepare natural gas to accelerate higher once it gets going. As long as a deeper pullback stays above the 34-Day EMA at 2.59, it should maintain a bullish outlook. A breakout above today’s high of 2.74 will provide the next sign of strength. That would then need to be followed by a move above last week’s high.

Measured Move

Natural gas hit a swing high of 3.03 at the end of a 53.9% advance off the first trend low at 1.97 (1). That is now the next target zone. A measured move starting at a lower trend low of 1.95 (2) matches the percentage advance of the first move (1) at a price of 3.00.

Signs of Strength

A breakout and daily close above last week’s high will show strength relative to the 100-Day EMA. Natural gas has remained below the line since December 19. A close above it is a sign that the intermediate trend is improving, which supports the thesis for higher prices. Once the measured move target is complete, the nigher target zone is up around the 23.6% Fibonacci retracement at 3.28.

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