Natural Gas Pulls Back to Test Support After Reaching Target Zone

Natural Gas Forecast Video for 11.08.23 by Bruce Powers

Natural gas reached its first major target zone yesterday with a high of 3.02 before encountering resistance today that led to a pullback to test previous resistance as support. Today’s low is 2.75, which just about reached possible support of the 100-Day EMA around 2.724. Notice that the 100-Day line has converged with an internal uptrend line. Two indicators showing a similar price area makes that area one to watch. Further, the 50% retracement completes at 2.74.

Testing Areas of Support

As we move on to Friday’s trading session the internal uptrend line will be marking a support area slightly higher than the 100-Day line given its rising slope. Also, watch for support around the downtrend line starting from the June 28 swing high. Today it is around 2.71 but will rise slightly over time since it is ascending. The downtrend line is critical as it previously marked dynamic support of the bottoming formation prior to the upside breakout two days ago.

Nevertheless, the 61.8% Fibonacci retracement completes below the downtrend line at 2.67. However, that will depend on when it is reached. If it takes more than five days, this will not be the case as that is when the 61.8% level and the downtrend line converge.

Reaches Five-Month Closing High

This week’s bullish breakout also triggered a monthly breakout as natural gas rose above July’s high of 2.79. It also closed above it, thereby confirming strength. But that is not the end of it. This week’s rally also took natural gas above June’s 2.88 high, and it closed above it. So, that is a five-month high for natural gas. This bullish price action in the monthly chart provides further evidence to support an eventual continuation higher.

Above 3.03 Targets 3.20

Following an advance above the top of the range of the first target zone, above 3.03, natural gas heads towards the next identified price zone from approximately 3.20 to 3.31. It includes several Fibonacci measurements and marks symmetry of the current advance relative to the prior. At 3.20 the current leg up matches the advance seen off the June swing low (A to B).

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