Natural Gas Forecast: Will it Breakout or Breakdown?

Natural Gas Forecast Video for 13.04.23 by Bruce Powers

So far, the attempt by natural gas to move higher has not been following through in a way that confirms growing interest from buyers. Both last week’s high and the three-week high were exceeded in the past two days. Yet, today natural gas is showing weakness as it has dropped below the half-way point of the week’s range. Of course, the week is not over, and strength could return before the close Friday. At the same time, further signs of weakness may follow.

Key Support at 2.01, Two-week Support at 1.99

The low for the week and key support is at 2.01. If natural gas falls below there the door is open for a continuation to the downside. Two-week support and the low of the current retracement are at 1.99. A drop through the current low of the retracement downtrend will have natural gas next targeting the trend low at 1.97 from February. Once that price level is busted it next heads towards prior support around 1.79.

Strength Could Return Following a Move Above Last Week’s High of 2.20

If strength starts to return before the end of this week, it will first be seen on a new advance above last week’s high of 2.20, then confirmed on a daily close above that high. Once there is a daily close above last week’s high the underlying sentiment may start to shift in a sustainable way. We’ll have to watch and see. Further, the 21-Day EMA, which signifies resistance, can be watched as it lines up near the weekly high. Currently, the 21-Day line is at 2.23. That line has done a good job of marking trend resistance since price dropped back below it the second day of the retracement.

Potential Double Bottom Trend Reversal Pattern

If natural gas can close above last week’s high, and then sees further signs of strength, it has a good chance to eventually match or exceed the recent swing high of 3.03. Additional signs of strength would then be seen on a rally above that swing high, as that would trigger a double bottom trend reversal pattern. The second low of that pattern is where natural gas is now. It has not yet been determined whether the second leg will happen as a bearish continuation will negate the potential double bottom.

For a look at all of today’s economic events, check out our economic calendar.