Natural Gas Forecast: Bearish Momentum Continues, What’s Next for the Market?

Natural Gas Forecast Video for 20.10.23 by Bruce Powers

Natural gas continued its retracement Thursday, falling to a low of 2.94 before finding intraday support. Yesterday’s bearish inverted hammer candlestick pattern triggered earlier in the session on a drop below 3.04. That was followed by another bearish signal on a drop below the retracement low of 3.02. It then kept falling until finding temporary support at 2.94. The market is not closed yet so the low price may vary by then.

Lower Prices Likely

The decline is probably not over yet as the next lower support zone is identified from 2.90 to 2.88. Yesterday’s high tested the 200-Day line as resistance, and price was rejected to the downside. Today, we’re seeing the results of that being a continuation of the bear trend retracement. This is classic price behavior in a weakening trend. Up until five days ago natural gas was trading above the 200-Day line for six days. That breakout has failed and today we see a continuation of that failure as natural gas falls further below the 200Day line.

Monthly Bearish Pattern Developing

Although there are still eight trading days left in the month, the pattern developing in the monthly chart for natural gas is a bearish inverted hammer candlestick. If the current retracement continues it is possible that natural gas will remain near the low of the month’s high to low trading range at the end of the month. In that case the bearish pattern will remain valid. What this means is that starting in November a drop below this month’s low is bearish and could mark a significant reversal in natural gas for the time being.

200-Day EMA is Key Indicator

The second thing it tells us is that natural gas will likely get back above the 200-Day EMA before the end of the month if it is to remain bullish on a monthly time frame. A triggering of the monthly candle could lead to natural gas testing and possible breaking below prior swing lows that define the rising trend channel. Nevertheless, until then the expectation is for it to find support and reverse higher and attempt to reach new highs for the current rising trend.

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