Strengthening Signs in Natural Gas Market: Targets and Upward Momentum

Natural Gas Forecast Video for 19.07.23 by Bruce Powers

Natural gas shows signs of a bottom as it triggers a daily bullish reversal on a rally above yesterday’s 2.58 high. Further, it is now back above the trending indicator, the 34-Day EMA. We will continue to watch for new signs of strengthening to assess the potential for natural gas to eventually rise to a new trend high. The most recent trend high was 2.88.

New ABCD Pattern Targets 3.28

Assuming the recent low is complete natural gas should further strengthen. A new ABCD pattern has been added to the chart with an initial target at 3.28. However, there remains the lower target zone and next in line from approximately 3.00 to 3.03.

If the retracement bottom is in, then it shows signs of strengthening. It completed around the 50% retracement. That shows relative strength compared to the two previous retracements. The first (2) retraced around 78.6% and the next was 61.8%. Buyers are stepping in more aggressively on each retracement phase.

Angle of Ascent Improves

A new up trend line has been added to the chart connecting to the recent low. You can see the shift in the slope of the trend as the angle of ascent increases. This reflects improving demand and upward momentum. It improves the chance that natural gas will eventually reach the second target zone starting from 3.28. You can also see signs of strength in the relationship to the 34-Day EMA. During the prior two pullbacks prices traded above and below the line over some period. However, for the current retracement price only went a little below the 34-Day line before a bullish reversal took hold.

Breakout Above Last Week’s High

The next price level to watch is last week’s high of 2.75. Once it is exceeded to the upside natural gas will have confirmed its bullish reversal and completion of the correction. First though will be the break of the small downtrend line. Natural gas attempted to do it today but does not look like it will close above the line, which is needed to confirm strength.

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