Natural Gas Shows Signs of Strength: Bullish Patterns and Uptrend Support

Natural Gas Forecast Video for 13.06.23 by Bruce Powers

Natural gas retraces further before finding support at the day’s low of 2.21. Today’s decline successfully tests support of the uptrend line, and it holds. The developing advance off the 2.14 swing low should be able to continue. Today is on track to complete a bullish hammer candlestick pattern. A bullish signal will be indicated on a rally above today’s high of 2.32 and further confirmed on a move above the most recent swing high of 2.38. Once there is a daily close above that swing high natural gas will be heading towards the Fibonacci levels as noted on the chart.

Following the First Low Natural Gas Rallied 54%

During the decline that started off the August 2022 swing high natural gas first hit a bottom at 1.97 (1) in February. That low led to a 53.9% advance in only seven days. That high was followed by a correction all the way back to the bottom and eventually to a new trend low at 1.95 (2). Subsequently, there was a 30% rally in April and a 32.2% advance in May.

Current Advance Structure

The current advance started on June 1st, and it has seen natural gas rise by as much as 11.4%. Just based on the prior rallies along natural gas has more upside to go. An initial core target zone resides from around 2.77 to 2.83. That price zone includes Fibonacci confluence, the 100-Day EMA, the completion of an ABCD pattern, and the top trendline of the rising parallel trend channel. That target is roughly another 20% above current trading levels for natural gas.

Upside Potential for Natural Gas

Given the developing price structure of the bottom natural gas seems to have more upside potential than down. It has been a frustrating couple months for the bulls but eventually markets evolve and change. Natural gas will as well. There is a clear uptrend that has been developing with a series of higher swing highs and higher swing lows. Each decline is met with support before going to new lows. At this point that will be the case unless there is a drop below and subsequent close below the most recent swing low at 2.16.

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