Natural Gas Price Forecast: Targets are Lower Amid Aggressive Selling Pressure

Natural gas continued its bearish correction on Tuesday with a new retracement low of 3.38, at the time of this writing. It continues to trade near the lows of the day and could hit lower prices before the end of the day’s session. Notably, the 50-Day MA at 3.50 failed to halt the decline and natural gas looks well on its way to testing lower target zones.

Bearish Behavior

Today’s candlestick pattern is a wide range red pattern with an open near the top of the range and a likely close near the lows. This shows aggressive selling that further confirms weakness from the 50-Day MA breakdown. Notice that similar candle patterns occurred on the day of the trend high at 4.37, and at the second swing high that followed. Consider future similar indications of selling pressure that could occur in natural gas or other instruments.

Prior Swing Low at Risk

There is a potential support area at 3.39, which was a prior swing high that helped construct a large symmetrical triangle bottom pattern. But given the downside momentum seen today, it could easily be broken. A little lower is a price range from 3.30 to 3.27, with the lower level possibly having greater significance as it is the 78.6% retracement level.

Sharp Drop Points to Lower Prices

Nonetheless, given the sharp drop being witnessed today, lower prices remain targets. The bigger pattern unfolding is a pullback following the long-term breakout of a large symmetrical triangle formation. A decisive breakout triggered on November 21, which eventually led to the recent 4.37 swing high. There was an initial pullback to test the breakout area as support and it was successful.

However, the current retracement could provide a similar function but on a larger scale. That would be a test of the 3.02 price zone or thereabouts. Regardless of whether it is reached, it does provide evidence for a deeper correction than what has been seen so far post triangle breakout. Below the 3.27 area is another prior swing high and now potential support from June of last year at 3.16.

Lowest Closing Price in 15 Days

Moreover, Tuesday will likely end with natural gas closing at its lowest price in 15 days and a prior swing low is only a little lower at 3.33. Therefore, a drop below that price level further reverses the bull trend that began from the August swing low at 1.88.

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