Current Correction in Natural Gas Sets Up for Next Advance

Natural Gas Forecast Video for 24.05.23 by Bruce Powers

Natural gas further retraces its most recent advance after reaching resistance at last week’s 2.69 high. The 50% retracement level at 2.36 has been exceeded and natural gas next heads towards the 61.8% Fibonacci retracement at 2.28. That is very close to the 2.25 weekly low. A drop below that weekly low will next have natural gas targeting the 78.6% Fibonacci retracement zone at 2.17. The short-term trendline support is also close to that price area.

Monthly Bullish Reversal

A bullish reversal occurred this month on the monthly chart thereby improving the outlook for natural gas. However, it remains in a consolidation zone near trend lows and can take more time before it is ready to trend higher. The monthly chart indicates it is likely to happen but not necessarily right away. This we have already seen it is again testing prior lows during the current pullback. It is about to complete its fourth month consolidating near trend lows.

Trading Inside-Week

On the weekly chart natural gas is trading inside last week’s range so far and it may continue to do so throughout the week. Certainly, it will if last week’s low is not exceeded to the downside. If the week ends with an inside week, this week’s high can be watched as a signal. A bullish signal would be indicated on a decisive rally above 2.57 and then confirmed on a daily close above that high.

Watch the 50-Day EMA on Next Rally

The 50-Day EMA is the blue line on the chart. Note that the April rally found resistance at the line and did not close above it. Recently, the price of natural gas advanced above the 50-Day line again and closed above it on two days. This is one other example of how natural gas is starting to show strength. Watch the 50-EMA as potential resistance on the way back up. If it closes back the line on a daily basis, that will be a bullish sign. Once natural gas can move away from its bottom and stay away, it has a good chance of reaching some of the higher targets as noted on the chart.

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