Natural Gas on the Brink of Bearish Continuation: Can bulls turn it around?

Natural Gas Forecast Video for 23.03.23 by Bruce Powers

After triggering a bearish trend continuation yesterday natural gas consolidates within the prior days range. The only fortunate thing for the bulls is that so far, the market recognized the 88.6% Fibonacci retracement area yesterday as price was rejected off it.

Nearby Price Levels to Watch

A drop below yesterday’s low of 2.24 triggers a new bearish signal and opens the door to a new trend low in natural gas, below the 2.11 low in February. Otherwise, we need to see a move above the three-day high of 2.52 for signs of strength. That would be an early signal. We would then need to see additional signs that buyers are stepping in more aggressively. A decisive move above the five-day high of 2.66 would provide greater confidence and at that point natural gas would also be back above its 21-Day EMA trend indicator. Moreover, a daily close above the minor swing high at 2.79 provides a more significant breach as it is a part of the retracement downtrend trend structure.

Measured Move Pattern Potential Target of 3.28

If a bottom is seen at “C” then natural gas has the potential to complete a measured move or ABCD pattern at 3.28. A more significant target is highlighted in red from around 3.44 to 3.57. There are several price levels identified within that zone from Fibonacci measures as well as previous swing highs and lows.

Double Bottom Could Be in Early Stages

Further, if the recent 3.16 swing high is broken to the upside a double bottom trend reversal pattern will trigger. The classic target from the pattern is around 4.21. This means that the advance off the recent bottom (if it is a bottom) has a good chance to keep moving higher and possibly eventually testing resistance of the 200-Day EMA (now at 4.95).

Several price clusters are marked on the chart identifying price areas that stand out, either as Fibonacci confluence zones or combined with levels identified by previous price action. Those are areas to watch for possible resistance on the way up.

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