Natural Gas Forecast: Potential Upside Targets and Price Action Analysis

Natural Gas Forecast Video for 06.04.23 by Bruce Powers

For the past nine days natural gas has been chopping around near trend lows in a relatively narrow range. The high of range, marked with a right extended horizontal line in purple on the chart, is at 2.26, and the low is around 2.00. If natural gas can get above the upper range, it has a chance to go higher. Of course, alternatively, a drop below 2.00 is bearish and may see natural gas continue to fall and certainly test the 1.97 low from February.

Upside Weekly Breakout Signaled Above 2.24

Another way to look at the current situation in natural gas is on the weekly chart. Here, there is a bullish hammer candlestick pattern from last week. So far, this week’s price action is contained within the range of last week, representing consolidation on a weekly basis. An upside weekly breakout is indicated on a move above last week’s high of 2.24, and then confirmed on a daily close above that high. If natural gas ends this week as an inside week, then next weekly the high of this week may provide a signal. But first this week needs to end. The daily price levels noted in the first paragraph can also be taken into consideration if so desired, in which case a move above 2.26 would be used for a bullish reversal signal.

If an upside breakout does eventually occur, the Fibonacci retracement levels at 2.51, 2.63, and 2.81, can be watched as potential near-term targets. However, the more significant targets would be higher.

Chance for Aggressive Rally Post Bullish Reversal Signal

The first leg up off the bottom of the trend in late-February saw natural gas advance by 53.9% in only seven days. A similar enthusiastic rally could be seen again off the 2.00 low. So far it has not happened but once a bullish reversal signal is indicated the chance for an aggressive rally improves. This is not a prediction, just a possibility to be prepared for. An ABCD pattern would be in play following a bullish reversal with a target of 3.06.

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