Natural Gas Forecast Video for 17.04.23 by Bruce Powers
Natural gas triggers an inside day down and a bear trend continuation before finding support at a new trend low around 1.95. The prior trend low from February was around 1.97. Now that that low has been busted the likelihood of the downtrend continuing has increased. At the same time, further bearish confirmation is needed.
Bearish Signal Fails to Confirm Downtrend Continuation
So far that has not happened, as natural gas is looking like it will close higher than today’s low and possibly at a three-day closing high. Rather than seeing sellers get more aggressive on the new trend low, price has bounced instead. This is a failure of the bearish signal, at least up to this point.
A second drop below the 1.97 trend low will provide another bearish signal for a trend continuation to the downside. However, especially given what we’ve seen recently, where gold dips to a new trend high but quickly reverses back up again, caution should be used. There is little or no downside momentum that kicks in on a breakdown.
Bearish Descending Triangle Pattern
Now that the trend lows have clearly been tested and have held up so far, a lower horizontal line can be drawn. A descending triangle pattern then becomes apparent. It is not perfect, yet it does tell us something about timing. Natural gas will break out of one of those two lines before reaching the point in time where the lines cross. That should happen in no more than six days.
Signs of Strength on Breakout Above 2.25
The 21-Day EMA merges with the downtrend line that defines the top border of the descending triangle pattern. It highlights the price zone that needs to be exceeded before the sustainability of a rally is improved. When two indicators are pointing to a similar price pivot, a breakout could see an explosive move as the significance of the pivot zone is enhanced.
The latest minor swing high is at 2.25. If natural gas can get above there and stay above that price zone, it has a chance to go higher. It will also be above both the downtrend line and 21-Day EMA at that point, providing further confidence for a bullish reversal.
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