Navigating Natural Gas Market: Retracement, Strength Indicators, and Price Targets

Natural Gas Forecast Video for 23.05.23 by Bruce Powers

Natural gas further retraces the pullback started last week off a high of 2.69 hit on Friday. The day ended with a bearish shooting star candlestick and followed through to the downside today. A 50% retracement completes at 2.36, while the low of the day is 2.37.

Retracement May Not be Over

There is no indication yet that the retracement is complete and judging by the relatively sharp drop today, we need to anticipate that the 61.8% Fibonacci retracement at 2.81 may be reached. A drop below today’s low will trigger a bearish continuation. Further down from there is the 78.6 % Fibonacci retracement, where support may be seen. Other price areas to watch for support include last week’s low of 2.25.

Bullish Outlook Remains

Nevertheless, a resolution to the upside is anticipated once the correction is complete. A bullish breakout for natural gas occurred on the longer time frame monthly chart this month. It will confirm strength on a monthly chart if May closes above last month’s high of 2.53. Recent activity in natural gas remains around the trend lows and a daily close above April will confirm strength and increase the chance for natural gas to move away from the bottom and trend higher.

Upside Target Zone Identified by Multiple Indicators

Traders should watch the current retracement closely as bullish setups for entry could provide that last lower entry prices before natural gas moves higher. Intraday setups around the price levels noted above can be watched for and to improve risk vs reward. Stops should be able to be tighter. Once a bullish reversal occurs and prices keep rising the first target will be last week’s high. That price zone is followed by the 2.80 area, which consists of Fibonacci confluence. That zone is then followed by the more significant 2.97 to 3.03 target zone. The zone includes the completion of a large, measured move, the 100-Day EMA, a prior swing high, and Fibonacci confluence.

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