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Natural Gas Price Analysis: Will Bullish Momentum Prevail?

By:
Bruce Powers
Published: Mar 15, 2023, 19:57 UTC

Natural gas correction in progress amid significant support zone and bullish monthly candlestick pattern.

Natural Gas, FX Empire

In this article:

Natural Gas Forecast Video for 16.03.23 by Bruce Powers

Natural gas breaks below weekly support as last week’s low of 2.55 was breached to the downside. Where it closes will be telling. A close below that price levels indicate weakness, while a daily close above it is not quite as bearish.

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Support Zone from 2.51 to 2.47

Nevertheless, natural gas is at the top of a potentially significant support zone that goes from around 2.51 to 2.47. At the time of this writing the low for the day was at 2.50. If that zone fails to hold then the next lower range to watch for support, and the possibility for a bullish reversal, occurs from around 2.37 to 2.34.

Despite the drop below last week’s low, natural gas remains in a normal retracement following a 49.4% advance off the recent trend low at 2.11. That’s a pretty large advance in only seven days and therefore it is healthy for the underlying trend to see a descent correction before price is ready to advance again. We are seeing that now. So far, the retracement is constructive and completed a 61.8% Fibonacci retracement today at 2.51/2.52.

Monthly Time Frame Completed Bullish Reversal

The monthly time frame is also important. Last month natural gas completed a bullish reversal hammer candlestick pattern. A bullish trigger occurred at the beginning of the month, and it was confirmed with two daily closes above the February high of 2.90. This does not mean that natural gas cannot continue to trend lower from here, just that the larger time frame has provided bullish signs. Since the larger time frame is more significant than shorter time frames, the outlook remains bullish for natural gas once the current correction is complete.

First Sign of Strength is on Move Above 2.71

At this point, the first sign of strength is on a move above today’s high of 2.71 and further confirmed above 2.79. Once the 2.79 is broken to the upside natural gas has a real chance to follow-through on the bullish monthly candle setup. It then heads to the first major target zone around from around 3.44 to 3.54. That zone consists of multiple Fibonacci levels, prior price structure, and monthly price levels.

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About the Author

Bruce boasts over 20 years in financial markets, holding senior roles such as Head of Trading Strategy at Relentless 13 Capital and Corporate Advisor at Chronos Futures. A CMT® charter holder and MBA in Finance, he's a renowned analyst and media figure, appearing on 150+ TV business shows.

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