Natural Gas Teases the Bulls as it Pops Above Last Week’s High

Natural Gas Forecast Video for 11.04.23 by Bruce Powers

For the past 11 days natural gas has been trading sideways near the low of its downtrend. A high for the range is at 2.26 and the low at 1.99. Breakouts, either up or down, are treated with caution until additional confirmation is seen to ensure a valid signal.

Possible Bullish Reversal Above 2.20

Today, natural gas showed strength by rallying above last week’s high of 2.20 to reach 2.22 before pulling back. This move has the potential for a weekly bullish reversal if natural gas can close above last week’s high on a daily basis. Also, a move above today’s high of 2.22 will be another attempt by to continue a bullish weekly reversal. Natural gas has not seen a new weekly high advance above the prior week’s high since the retracement down from the February swing high that began six weeks ago. This may be an early sign of a change in character.

14-Day RSI Maintains Uptrend and Showing Bullish Divergence

Further, the 14-Day RSI continues to maintain an uptrend as marked by the trendline on the chart. The RSI shows a bullish divergence with price. Natural gas remains in a downtrend while upward momentum is slowly starting to improve. Once a breakout in price is confirmed that underlying momentum has the potential to accelerate price higher.

Bearish Continuation Remains on Deck

A bearish scenario may play out if natural gas falls below last week’s low of and closes below it on a daily basis. At that point, natural gas would first be heading towards the trend low of 1.97, followed by 1.79, which was previously swing low support.

Initial Upside Short-term Targets

If instead of a bearish continuation, natural gas shows further strengthening, there are Fibonacci retracement levels drawn on the chart that can be watched for potential early targets. The first one being the 38.2% Fibonacci retracement at 2.39. That price zone is strengthened by the fact that the 34-Day EMA converges with the Fibonacci level as it is currently at 2.40.

For a look at all of today’s economic events, check out our economic calendar.