Natural Gas Forecast: Testing Support, Bullish Continuation Ahead?

Natural Gas Forecast Video for 22.06.23 by Bruce Powers

Earlier in today’s session natural gas dropped below yesterday’s low to test support of the internal uptrend line. It held with a low of 2.35 before price was rejected to the upside. That low completed a 50% retracement of the previous low to high swing. Natural gas is on track to close green possibly in preparation for a bullish continuation higher.

Might Retracement Been Completed Today?

It is possible that today’s low competes the current retracement and natural gas is ready to proceed higher. A daily close above today’s high of 2.60 will confirm strength and increase the chance for a new trend high. Natural gas next targets a resistance zone from 2.77 to 2.83. It is the culmination of a variety of indicators all pointing to the same price zone.

Alternatively, a drop below today’s low could lead to a deeper retracement. If this scenario unfolds prior to a move to a new trend high, then watch for support around the weekly high and daily swing high of 2.38.

Potential for Acceleration Higher

It is also possible for natural gas to accelerate its advance, increasing upward momentum to the point that it can break through the first target zone noted above. The angle of ascent of the rising trend channel measured by the estimated angle of the lower channel trendline has been relatively low. If additional signs of strength kick in demand could improve to the point where prices rise more aggressively than what has occurred in the advances so far from the trend low (2).

Previous Sharp Rally

An example of an aggressive advance can be seen in the rally off the initial trend low (1). That rally saw natural gas prices rise by 53.9% in only seven days. It is too late for the current advance to come close in time as it is already day 13 off the 2.14 low (C). However, an acceleration in price is still possible. This is not a prediction, just an observation. It seems likely that the second target zone highlighted in red on the chart will eventually be reached. This scenario just suggests that it is possible to happen sooner than it seems.

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