Relentless Selling Pressure Puts Natural Gas at 20-Day Low
Natural Gas Forecast Video for 21.03.23 by Bruce Powers
Natural gas has pulled back as much as 26% off its most recent swing high at 3.15. That high ended a 49.4% advance off the trend low from February 22 at 2.11. The prior low is now at risk of being taken out if the current correction doesn’t arrive at support soon. It is looking more and more like natural gas may drop below the recent trend low and keep falling.
Close to Breaking Below Support Zone
As of today, natural gas has hit the lower identified support zone on the chart consisting of a couple Fibonacci levels from 2.37 to 2.33. The lower level completes a 78.6% retracement. Yet, natural gas remains near the low of the day indicating selling pressure is still dominating.
A daily upside reversal is first indicated on a move above todays high of 2.52. Natural gas will then need to rally above the three-day high of 2.66 to show further strength. Currently, the 21-Day EMA is also at 2.66. It is used as a trend indicator and can be watched on the way up as well, if higher is the next direction.
Closer View on Intraday Chart
This next chart gives a 4-Hour view of price action and therefore provides more detail than the daily. Here, you can see that the near-term downtrend doesn’t provide a good bullish signal until price exceeds the swing high of 2.79.
If natural gas does continue lower and drops below 2.11, the next lower target looks to be around prior monthly support levels from around 2.04 to 2.00. Not solid levels however as there are a number of potential areas where support might be seen if natural gas continues to fall.
The upside potential of a bullish reversal remains however as the key target zone is up at 3.55 area. Once natural gas turns higher and the bottom is set, that target zone should eventually be reached. Until then, keeping on top of risk remains that primary objective.
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