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Natural Gas Price Forecast: Potential Retracement to 1.76/1.70 Support Zone
By: Bruce Powers | March 7, 2024

• Natural gas faced resistance at 1.95 - 1.97, likely heading towards support at 1.76/1.70. Short-term patterns hint at a potential reversal soon.

Following an inside day breakdown natural gas enters a deeper pullback from the recent 2.01 trend high. That high stuck resistance around the long-term downtrend line and previous trend lows, now resistance at 1.95 – 1.97. The 8-Day MA did not show signs of support as natural gas fell right through it and looks to be on its way to the prior swing high at 1.79 and possibly lower.



Maximum Retracement Possible to 1.76

The next lower likely price support area looks to be around 1.76/1.77. The 50% retracement is at 1.755 and the 20-Day MA is at 1.70. That zone could be the maximum for this retracement. Certainly, that would be a spot for it to happen.

Short-term Pattern Stands Out

There is one short-term price pattern that stands out and may or may not mean anything. We’ll know soon. The first pullback from the 1.79 swing high begins with the open to close range of the day occurring within the body of the previous day. Let’s call it a partial inside day. Then there was one wide range accelerated decline seen as a full-bodied red candle. The low of that day turned out to be the completion of the retracement. Similarly, the recent 2.01 swing high was followed by an inside day. Now today, Thursday, there is a sharp retracement likely to end with a large red candle. Might we see something similar next?

Weekly Chart Analysis

One more piece of that analysis to add can be seen on the weekly chart (not shown). Given today’s decline, it is currently on track to end with a weekly bearish shooting star candlestick pattern. However, if today’s low turns out to be the low or close to the low of the retracement, and it is followed by bullish price action, the weekly candlestick pattern may not end as bearishly.

Watching Price Action Relative to 20-Day MA Closely

The reaction of price around the 20-Day MA should provide a clue about underlying strength that could support a advance higher. Or help determine if the recent high completed an ABCD counter-trend rally in a downtrend and the bearish sentiment remains dominant.

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