Natural Gas Forecast: Technicals Suggest Higher Prices

Natural Gas Forecast Video for 28.02.23 by Bruce Powers

Following a bullish reversal off last week’s 2.11 low, natural gas continues to show signs of strength as we head into the new week. It has cleared above last week’s 2.73 high and has risen above the 21-Day EMA trend indicator. As of today, it has also exceeded a five-week high. Further, the 14-Week RSI has turned up after being in oversold territory. These are all bullish technical signs pointing to higher prices for natural gas.

Next Target Zone: 2.97 to 3.06

The next target zone to watch is around 2.97 (orange dash) up to 3.06. That’s where both support and resistance was seen in the past. That price zone is then followed by a more significant price zone from around 3.42 to 3.54. That zone is where there was a swing low and high in the past and the top of the range completes a 23.6% Fibonacci retracement of the internal downtrend. In addition, the 50-Day EMA is currently at 3.46. In Fibonacci analysis the 23.6% retracement level is considered the minimum retracement to be incurred.

Monthly Candlestick Pattern Likely to Complete Bullish Hammer Pattern

It is also interesting to note that since February is almost over the monthly candlestick pattern for natural gas is likely to complete a bullish hammer pattern. If correct, then starting next month a breakout above the February high will provide a monthly bullish signal. Nevertheless, given the wide monthly range in February of 34.8% to date, natural gas can spend some time correcting and consolidating below the monthly high. This is true after a monthly bullish breakout and before it breaks higher if it is to do so.

Short-term Extension Makes It Difficult to Initiate New Entries

Natural gas is a bit extended in the short-term as it has already rallied as much as 34.8% off the recent trend low. This makes it difficult to initiate new entries right now. Once a pullback or consolidation develops new entry setups will be revealed. At this point, watch for support around 2.73 to 2.70. The four-week high is at 2.73 and the 21-Day EMA is now around 2.70. Also, three weekly highs are at either 2.73 or 2.70.

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