Bullish Outlook for Natural Gas Yet a Rest May Come First

Natural Gas Forecast Video for 22.05.23 by Bruce Powers

Natural gas reached its second initial target today with a high of 2.69, with resistance seen shortly thereafter. That high also reached potential resistance of the top trendline defining an expanding triangle at the bottom of the trend. Once the high was hit natural gas pulled back to end the day in the red. This tells us that for the uptrend to continue it probably needs some retracement and consolidation first.

34-Day Moving Average Support

Important support is down at the 34-Day EMA, which is now at 2.32. The low for the week is 2.25. This means that a drop below the 34-Day line opens the door for a drop to the weekly low. The 34-Day EMA recognized and tested on multiple days as either resistance or support over the past eight days. If a pullback did start today with intraday trading activity, higher prices are expected once it is resolved, other than a drop below the 34-Day line. If that occurs, the situation needs to be reevaluated.

Bullish Outlook Improving

The outlook for natural gas is improving. Two days ago, the RSI momentum oscillator turned up to break out of a bullish ascending triangle providing confirmation of the strength being seen in price. The week is on track to close strong near the high for the week and complete a wide-ranging green candle. On a weekly chart, natural gas is going to end the week above its 12-Week EMA for the first time since early-December, 22 weeks ago.

Bullish Monthly Chart

Finally, on the monthly chart, there is a potential bullish hammer candlestick developing. If the closing price for the month is above last month’s high of 2.53, another bullish piece of evidence will have occurred. We already have a higher monthly high and high low. It will remain if price doesn’t drop below the month’s low.

Going forward, natural gas can continue to trend higher without much retracement or consolidation. That would occur on a move above today’s high of 2.69. Or it does continue to retrace and consolidate before preparing to progress higher if it is to do so.

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