Navigating Natural Gas: Price Trends and Support Zones

Natural Gas Forecast Video for 23.10.23 by Bruce Powers

Following a bearish trend continuation signal earlier in today’s session natural gas found support at a low of 2.88. The decline completed a 61.8% Fibonacci retracement at 2.90 and found support at the June 28 swing high. This could be the completion of the retracement but there is no sign of it yet other than natural gas reached the next lower potential support zone and bounced. However, natural gas has been falling relatively hard so it may take some time and further testing of lows before the correction is over.

If Decline Continues

If natural gas continues to decline, or bounces first then turns back down, the next lower possible support zone may be reached. It goes from around 2.75 to 2.72 and consists of the 78.6% Fibonacci retracement, plus the crossover of the two trendlines, one rising and one falling. The uptrend line is the more critical trend indicator as it defines dynamic support of the rising trend channel.

Solid Rising Channel Structure

Note that each of the two channel lines are confirmed by more than three hits. Therefore, a breakout through either line could be significant and lead to a sharp continuation in the direction of the breakout. An interim support level may be seen at 2.82, which is a prior weekly low. Further, given the time developing and number of points identifying the channel lines, natural gas is expected to continue to evolve its trend channel following the current retracement.

Rise Above Today’s High of 2.98 Provides Bullish Signal

Nonetheless, a rise above today’s high of 2.98 signals strength on a daily time frame. Natural gas would then be heading up to test resistance around 3.02, the swing high from August, followed by the 200-Day EMA. The 200-Day line is currently at 2.90 and defines dynamic support for the long-term trend. Before natural gas has a shot at exceeding the recent swing high of 3.47 it needs to get back above and then close above the 200-Day line on a daily chart. A daily close above 3.02 increases the chance that natural gas will at least attempt another breakout of the 200-Day EMA.

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