Natural Gas Price Forecast: Hits New Low as Bears Dominate Market

Natural gas continued its retracement on Friday with a new trend low of 2.32. That puts it below a potential support range identified from 2.37 to 2.34. Therefore, the lower support zone from around 2.23 to 2.17 is the next lower target zone. The low of the day was 2.32 at the time of this writing, and trading continues near the lows of the day.

It will likely end the session in a weak position, closing in the bottom quarter of the week’s range. This would keep natural gas in a bearish position for the weekly time frame heading into next week and consequently improve the likelihood of reaching the next lower target zone before the retracement is complete.

Significance of Correction?

So far, the correction down from the 3.16 peak (A) has seen the price of natural gas decline by 0.86 cents or 26.7%. How does that compare with prior bearish corrections? Since the initial February 2023 trend bottom there have been five corrections with a decline of greater than 20% and three that saw drops of more than 26%. Those three corrections were 55.1%, 38.7%, and 35.7%.

Given the history, since a 26% decline has already been exceeded as well as the support zone, the potential of a minimum 35.7% has become more likely. This does not mean that it will happen, but the chance for it to happen has increased. If natural gas reaches 2.03 it will have dropped by 35.7% from the most recent swing high. That will be a pivot zone to watch if it gets that low.

Bears Dominate Bigger Picture

In the bigger picture the bears dominate as there remains a series of lower swing lows and lower swing highs on the chart. That pattern will remain unless there is a rally above the most recent swing high of 3.16, followed by a daily close above it to confirm strength. From the February bottom, the first upside breakout triggered on a move above the top of a symmetrical triangle bottom at 2.00. If a roundtrip is in process, the area around 2.00 could be tested as support given its significance initially as resistance. Of course, that would also more than match a 35.7% price correction.

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