Natural Gas Strengthens, Eyes Key Resistance Levels

Natural Gas Forecast Video for 20.09.23 by Bruce Powers

Natural gas shows strength as it rallies above a minor swing low at 2.82, then tests resistance around the August 31 swing high of 2.865. The high for the day at the time of this writing is 2.87. A breakout and subsequent daily close above the August 31 swing high is next needed to confirm strength. If that happens then natural gas should be on its way to test the August 9 swing high of 3.02 and might continue higher.

Rising ABCD Pattern Targets 2.94

An interim price level to watch is at 2.94. That’s the initial completion of a rising ABCD pattern. It completes where the CD leg of the developing uptrend matches the price change seen in the initial AB leg of the pattern. However, given how the price of natural gas has been developing since the August 24 swing low the possibility of the second target being reached must be considered. That would be at 3.06. It is where the target for the CD leg is extended by 127.2% (Fibonacci ratio) of the AB leg.

Eventual Test of 200-Day EMA?

Natural gas dropped below the 200-Day EMA (blue) back in December of last year and has stayed below it since. There has been no attempt yet to test the 200-Day EMA as resistance. If natural gas can close above the 3.02 swing high, it might have a chance. This doesn’t mean that it goes straight there but an eventual test of the 200-Day line is likely. The 200-Day EMA is currently around 3.22.

Minimum Fibonacci Retracement Points to 3.28

The retracement of the downtrend to date, measured from the November 2022 swing high, has not yet reached the minimum anticipated Fibonacci retracement of 23.6%. That occurs at 3.28, a little higher than the 200-Day line. This seems to support an eventual test of the 200-Day line as resistance given that there the possibility that at least the minimum Fibonacci retracement level would eventually be reached. How natural gas gets there is the question and how long will it take. These are questions we don’t have an answer to but will continue to take new price behavior into account to in search of clarity.

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