Natural Gas Completes Retracement as it Rises Above Friday’s High

Natural Gas Forecast Video for 09.05.23 by Bruce Powers

Natural gas triggers a daily bullish reversal following the completion of a 78.6% Fibonacci retracement. It advanced above Friday’s high of 2.17 and is on track to close above that high for Monday. In addition, it may even end the day’s session at a four-day high, which occurs on a close above 2.24.

Given today’s jump of over 4% today natural gas looks to have completed the most recent correction to the 2.14 low. Upside follow-through should continue from here. Last week’s low is now key support and a drop through it is bearish.

Watch for Break Above Last Week’s High

Last week’s high was 2.41. That is the next key resistance level to breakthrough for natural gas. If it can close above that high on a daily basis another sign of strength will be activated. Notice that the 14-Day relative strength index (RSI) momentum oscillator has formed an ascending triangle. An upside move above the trend line is supportive of further bullish moves in price as it show momentum picking up as price rises.

The first key trend indicator that will be encountered on the way up is the 55-Day EMA (blue). You can see it was touched by price recently and tested as resistance. Since it rejected price that first time it could do so again. At the same time, a daily close above that line will be bullish and likely lead to an accelerated move higher.

Primary Upside Targets

Key upside targets start with the completion of an AB=CD pattern around 2.61. That target can be combined with the 2.67 swing high from March. At that point, natural gas would have cleared above its 50-Day EMA and exceeded the latest swing high at 2.53. A daily close above the 2.53 swing high changes the structure of the downtrend as the uptrend is gaining and further negating the downtrend price structure. Higher up is the completion of a measured move at 3.00. That higher target also hits the first swing high off the bottom of the trend at 3.03.

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