Oil & Gas - Energy - Commodities - Resources (OILBRENT)

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Natural Gas Price Forecast: What’s Next for Traders?
By: Bruce Powers | February 14, 2024

• Natural gas prices continue a 7-day decline, with potential for further drops to lower support zone of 1.52-1.44.

Wednesday is the seventh day in a row that the price of natural gas will end in the red with a lower daily high and lower low. Support was seen off the day’s low of 1.59 leading to a stall in the decline with only a minor intraday bounce. Nothing convincing to indicate the selloff may be over. Regardless, the decline is closer to the end than the beginning. A previously identified support zone at 1.60/1.61 has stopped the decline so far. Yet, the minor bounce and likely weak close shows no letup in selling pressure. At the time of this writing, natural gas is looking like it will close within the bottom 25% of the day’s range.



Sellers Remain in Control

Selling momentum accelerated last week as weekly support at 2.02 failed to stop prices from falling further. This week, the potential 1.80 support zone was breached with little hesitation and prices have now fallen to the 1.59/1.61 price zone. That zone was a significant swing low back in March 2016, and it was support several times in the first half of 2020. Today’s low completed a 56.4% decline off the October 3.64 peak. Given the minor rejection of price from this support area and a weak close natural gas remains in a bearish position with a continuation lower the next most likely scenario unless evidence shows up to the contrary.

If Today’s Low is Broken, Natural Gas Targets 1.52

Lower price targets start at 1.52 and go down to 1.44. A classic 127.2% extended retracement target is at 1.49. That retracement of the recent 32-week rising trend channel is generally considered to be a minimum extended trend target from Fibonacci ratio analysis. Meaning, it generally has a good chance of being reached once the continuation of the trend is confirmed with a closing price.

Strength Indicated on Rally Above Today’s 1.69 High

At some point a tradable bounce will come. Certainly, if the 1.52 price zone is hit, the chance for a bullish reversal will increase. If instead today’s low holds and leads to at least a temporary bottom, the first sign of strengthening is given on an advance above today’s high of 1.69. Previous support levels should then be tested as resistance, starting with a price range from 1.95 to 1.98.

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