Natural Gas Price Analysis: Potential Shift from Bearish to Bullish Sentiment?

Natural Gas Forecast Video for 24.10.23 by Bruce Powers

The decline in natural gas continued today with a new retracement low of 2.86. Subsequently, buyers stepped up leading to an intraday bounce that turned today’s candle green from red. Today will likely be the first-time natural gas closes higher than the open in nine days, reflecting a possible change in sentiment from bearish to bullish. Support was seen today around the same price zone that was touched on Friday. It is anchored by the June 28 swing high at 2.88. Further, support of the 50-Day EMA (orange) is being tested today and so far, it is rejecting price to the upside.

Bullish Signal on Rise Above Today’s High

If today’s low continues to hold and be the bottom for the current retracement, then natural gas will provide a bullish signal on a decisive rally above today’s high of 2.95. It then heads north to test resistance around the 3.02 swing high from August, followed by the 200-Day EMA 3.17. The 200-Day line is an important trend indicator currently as natural gas tried to stay above it recently but failed after six days and fell back below the line.

If Natural Gas Can Close Above the 200 Day EMA, it Points Higher

If natural gas can close above the 200-Day EMA, it will then have a shot at continuing higher. The progression higher off the April trend low of 1.95 was contained within a rising parallel trend channel. Eventually, natural gas will be moving out of the boundaries of the channel. Currently, that looks like it will occur to the upside, and we will be watching for further signs of strength to confirm.

Following a daily close above the 200-Day EMA natural gas will have a chance to test the recent high of 3.47 and possibly exceed it. Higher targets above that swing high starts with a 200% extension (greater than 100% retracement) of the prior correction that began from the August 9 swing high at 3.61. However, there is a higher target zone from 3.77 to 3.85. It includes the minimum 23.6% Fibonacci retracement of the complete downtrend at 3.85. That minimum Fibonacci retracement has a good chance of eventually being reached as it is a minimum. And certainly, it could happen in the next rally.

Downside Support if Weakness Continues

On the downside, a deeper retracement remains a possibility and is indicated on a drop below today’s low of 2.86. Natural gas will then be testing a weekly low at 2.82 and will fall into an earlier gap below that down to 2.67.

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