Natural Gas Forecast: Uptrend Continues Amidst Consolidation. Waiting for New Breakout

Natural Gas Forecast Video for 20.07.23 by Bruce Powers

Natural gas breaks out to a new trend high on a move above 2.65 but it does not look like it will confirm that advance with a daily close above that level. Currently, natural gas is set to close with as a narrow range doji day. It remains bullish but not as bullish as it could be with stronger follow-through today.

Support Around the 34-Day Line Indicates Strengthening

A retracement low of 2.48 was hit two days ago. It is marked by the 50% retracement and 34-Day EMA. The question now is whether natural gas is ready to proceed higher, needs to retrace further first, or is going to move into a consolidation phase. This would be the first time since the bottoming process began that support was found around the 34-Day line, a sign of strengthening. Previous approaches towards the line as support have gone below the line, more than what was seen the other day.

Uptrend Since April 14 with Higher Swing Highs and Lows

Natural gas is set up beautifully to continue its uptrend begun off the April 14 low of 1.95. It was followed by a rising parallel trend channel with a series of higher swing highs and higher swing lows. The fact that support was seen at the 34-Day line for the first time indicates that demand is improving. Next, we need to see a bullish breakout to further confirm strength. First, the small downtrend line needs to be broken with a daily close above it. Next, a daily close above last week’s high of 2.75, also a daily swing high, shows the bulls back in charge. Until one of these levels is busted to the upside uncertainty will prevail in the natural gas.

Trading Inside Week

This week natural gas is trading inside week, meaning that it could easily stay within the high to low range of 2.75 to 2.49 for the whole week. Given that it is already Wednesday, it seems likely to stay within last week’s range throughout this week. If that occurs, then this week’s high following completion of the week will provide a bullish signal – a breakout of an inside day.

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