The Future of Natural Gas: Key Levels to Watch

Natural Gas Forecast Video for 05.05.23 by Bruce Powers

The retracement in natural gas moves into its fourth day down in a row, hitting a new pullback low just shy of 2.09. A 78.6% Fibonacci retracement completes at 2.09. Certainly, if natural gas is going to find support and reverse higher, the 78.6% area is where it should happen.

Daily Close Below 2.09 is Bearish

A daily close below 2.09 will put the lower range of the developing expanding target in sight. The recent trend lows are at 1.97 and 1.95 but the lower boundary trendline of the triangle is lower. This means that a new trend low may trigger but quickly die out as support is found near the lower boundary line.

Retracement Lows Setup Next Opportunities

If natural gas does complete the bottom and eventually heads higher, the current pullback lows may present one of the better opportunities. It is on track to end today bearish, near the lows of the day. Therefore, tomorrow may be telling depending on whether there is a reaction to the 2.09 potential support area. Either natural gas keeps falling immediately, it bounces off the 2.09 zone, or it stalls and consolidates around 2.09.

Advance Above 2.19 is Bullish

At this point, an advance above today’s high of 2.19 is the first sign of strength that might lead to higher prices. Certainly, natural gas can really move once it gets going. The most recent two rallies off the bottom of the trend saw price advance by 30% and 53.9%. Plus, the rallies happened quickly, in 10 and seven days, respectively. Plan for a potential bullish move in natural gas to be better prepared when the move comes.

Key Upside Targets

Upside targets are plentiful, with the first being the completion of a new AB=CD pattern, targeting 2.67. If today’s low changes however, the target may change slightly. The completion of a bottom should see natural gas subsequently reach the prior swing high around 3.00, which is also the completion of a measured move with the most recent rally off a low (2) matches the price advance in the first rally (1).

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