Is Natural Gas Poised for a Sustained Move Higher?

Natural Gas Forecast Video for 18.04.23 by Bruce Powers

Natural gas turns up, rising to a four-week high. It looks like silver may further show strength by closing at a four-week high on a daily basis. This would improve the chance for higher prices. Whether or not this is the beginning of a sustained move higher remains to be seen. Once a daily closing high above 2.25 confirms strength natural gas will next be heading towards the weekly high of 2.43, followed by the subsequent weekly high at 2.67. Also, note that the weekly RSI shown in the enclosed chart is starting to rise.

Signs of Strength

There is plenty of upside potential for natural gas if it can get going. The latest swing high of 3.03 from February is the first major target. In addition to the weekly targets mentioned above, Fibonacci retracement levels can also be seen on the chart. The 3.03 target is 33% higher than the current price of 2.28. That target can be combined with 3.01 to indicate a price zone of potential resistance. The 3.01 target is where the current rally matches the advance seen in the first rally that started from the February 21, 1.97 low. Higher up is the Fibonacci price zone shown from 3.30 to 3.32. It is interesting to note that the 21-Week EMA is currently around the same price area.

Caution Warranted

It is certainly possible that natural gas continues to chop around near trend lows as it has been rather than moving higher. However, at this point both the daily and weekly RSI plots are trending up, plus there have already been weekly bullish signals. Given the current chart setup, natural gas would need to fall below the trend low of 1.94 before there is a clear bearish signal.

If natural gas does continue to strengthen in the near term, it will attract interest and help provide upside momentum. Until then, proceed with caution in case it stays stuck near the bottom in consolidation.

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