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Unlocking Natural Gas Potential: Bullish Momentum Takes Hold

By:
Bruce Powers
Published: Sep 18, 2023, 20:15 GMT+00:00

Natural gas experienced a one-day turnaround, shifting from bearish to bullish, which points to higher prices.

Natural gas plant, FX Empire

In this article:

Natural Gas Forecast Video for 19.09.23 by Bruce Powers

Natural gas trades outside day today as it rises above Friday’s high following a drop below its low earlier in the session. Bearish sentiment dominated earlier in the session but by the end of the day the bulls took over. It looks likely that natural gas will complete Monday closing above Friday’s high of 2.736. If so, it would confirm a one-day bullish reversal. Therefore, upside follow-through should follow.

A graph with lines and lines Description automatically generated with medium confidence

Close Above 2.743 is 10-Day High

It is also possible that natural gas may close at a 10-day high, another sign of strength. That would be the case on a daily close above 2.743. Nevertheless, a rise above today’s high of 2.74 (at time of this writing) will trigger a bullish trend continuation. Subsequently, we’re watching for an advance above the most recent swing high of 2.82.

Once that happens an additional trend continuation signal will be triggered. The two previous higher swing highs will then be targeted. On August 31 natural gas hit an internal swing high of 2.865, which identifies a similar swing high to 2.878 that was hit on June 28 thereby identifying a price range.

The peak of advance from the April 14 trend low was at 3.018 on August 9. That’s a high price that natural gas needs to get above. However, the peak of the first rally off the low from February was at 3.027. Therefore, those two price levels are best combined together to identify a price high of 3.027. It is a price area for potential resistance as well as a pivot for higher prices.

Watching for Symmetry Between Swings

Following today’s bullish reversal natural gas is set to continue to advance off the September 7 swing low of 2.50. A rising ABCD pattern has been added to the chart to show two potential targets, one of which is above the 3.027 peak. The ABCD pattern is looking to identify symmetry or similarity between two swings, the AB leg of the uptrend and the CD leg. Once that occurs the chance for a reversal increases. At the same time, a decisive break through the price zone anticipates a continuation of the direction at the time. For natural gas a standard ABCD pattern completes at 2.94, while the pattern with the CD leg extended by the 127.2% Fibonacci ratio targets 3.06.

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

About the Author

Bruce boasts over 20 years in financial markets, holding senior roles such as Head of Trading Strategy at Relentless 13 Capital and Corporate Advisor at Chronos Futures. A CMT® charter holder and MBA in Finance, he's a renowned analyst and media figure, appearing on 150+ TV business shows.

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