Natural Gas Rally Stalls, but Bullish Sentiment Remains

Natural Gas Forecast Video for 03.03.23 by Bruce Powers

Natural gas reaches its first target today with a daily high of 2.99 (orange horizontal). This is a minor target identified from a variety of prior monthly highs or lows and estimated to range from around 2.94 to 3.03 approximately.

Natural Gas Hits Minor Target of 2.99

The low end of the range includes the 200-period EMA on the 4-Hour chart. It is being considered as a minor target because it was hit on the first rally up off the bottom reversal and higher levels have more technical confirmation of significance. So far since hitting the first target resistance zone, natural gas has stalled its ascent yet remains bullish near-term and pointed higher.

Monthly Bullish Reversal Hammer Confirmed at 2.94

A new bullish signal that further confirmed underlying strength triggered yesterday on an upside breakout of a monthly (February) bullish reversal hammer candlestick pattern. The pattern was triggered above 2.90 and then confirmed on the Wednesday’s close around 2.94.

Given its long-term nature, the monthly chart is providing some context for the new environment that natural gas is operating in – uptrend vs. down trend. However, if price falls back into February’s price range natural gas could chop around and consolidate before going higher. February’s monthly low-to-high range was 37.2%. So, there is a lot of room to move around if it ends up taking that path.

A new bullish signal is triggered on a decisive move above Thursday’s high of 2.99 and then clears the potential resistance zone on a move above 3.03. If natural gas keeps rising from there it heads towards the more significant target zone from around 3.42 to 3.55. There are other price levels below that target as well reflected in the Fibonacci price levels noted on the charts.

Watch for Retracement Below 21-Period EMA

Alternatively, a drop below the 21-Period EMA on the 4-Hour chart, now at 2.84, and today’s low of 2.85, points to some degree of retracement or consolidation before going higher. Fibonacci retracement levels can be watched on a pullback for signs of a bullish reversal if a retracement develops before going higher.

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