Navigating Natural Gas: A Look at Key Levels and Potential Pathways

Natural Gas Forecast Video for 11.10.23 by Bruce Powers

Natural gas remains stalled near trend highs and pushing up against resistance of a top trend channel line along with the area of the 50% retracement at 3.38. Yesterday formed a potentially bearish inverted hammer candlestick pattern and today natural gas is showing a pause as it trades inside day. The RSI reading has just entered overbought territory yesterday.

Upside Breakout Above 3.45

An upside breakout of the inside day occurs on a move above 3.45 and is further confirmed on an advance above yesterday’s high of 3.47. Subsequently, there are four potential higher targets. The first being 3.61, which is the 200% extension (great than 100% retracement) of the last decline that began from the August 9 swing high. Subsequently, there is a resistance zone from 3.77 to 3.85. The higher level completed a 23.6% Fibonacci retracement of the full decline begun from the August 2022 high. That price zone is followed by the 38.2% retracement of the internal downswing measured from the November 2022 swing high.

Downside Correction Indicated on Decline Below 3.34

If a retracement comes first instead of an upside continuation, the first sign of weakness will be on a drop below today’s low of 3.34, and then on a decline through yesterday’s low of 3.32. If a bullish outlook is to be maintained during a retracement, prior key resistance zones should behave as support. The first one being the 200-Day EMA, now at 3.18. It was December of last year that natural gas fell decisively below the 200-Day line, and it remained below it until last Friday.

Lower still is the 3.02 price zone. That is where resistance was seen previously at the top of the uptrend and the 50% retracement of the current rally. When two indicators identify the same or similar price level, pay attention. This zone will either be strong support and turn price back up, or a drop below it improves that chance that natural gas may test support of the long-term downtrend line or uptrend line. If so, the 61.8% Fibonacci retracement level is on the way down at 2.90.

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