Natural Gas Weekly Forecast: Nat Gas Chart Signals a Possible Price Reversal
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Natural Gas Technical Outlook
- Natural gas bears are still in control
- Nat gas price, levels and thresholds to know
Natural Gas – Multi-Year Low
On Jan 19, natural gas tumbled to $1,815 -its lowest level in nearly four years. The price rallied as some shorts seemed to cover. On Friday, the market closed in the red with 6.1% loss.
Last week, the Relative Strength Index (RSI) abandoned oversold territory. However, the oscillator remained flat this week reflecting that bears were not done yet.
Nat-Gas DAILY Price CHART (May 15, 2018 – JAN 30, 2020) Zoomed Out
Nat-Gas DAILY Price CHART (Sep 27 – JAN 30, 2020) Zoomed IN
Looking at the daily chart, we notice yesterday natural gas reverted back to the lower trading zone $1,819 - $1,915 highlighting natural gas bears attempt to resume bearish price action.
A close below the low end of the zone could embolden bears to press towards $1,700. Although, the weekly support levels underlined on the chart (zoomed in) should be considered as some traders could join/exit the market nearby theses points.
In turn, any failure in closing below the low end could mean bears hesitation. This may reverse the market’s direction towards the high end of the zone. Further close above this level could lead more bears to ease up and encourage bulls to take charge. This might cause a rally towards $2,034. In that scenario, the weekly resistance level underscored on the chart should be monitored.
Natural Gas price Four-Hour PRICE CHART (Nov 5 – JAN 30, 2020)
From the four- hour chart, we noticed this week natural gas opened with a gap to the upside. The price rallied above the downtrend line originated from the Jan 6 high at $2,140. Since then, the price remained trading above this line.
Its noteworthy that, natural gas could be developing a double bottom pattern. Any violation to the neckline residing at $1,959 could lead the price towards $2,069 or possibly higher.
Thus, a break above the neckline mentioned above may cause a rally towards $2,034. Yet, the psychological resistance at $2,000 handle should be kept in focus. On the other hand, a break below $1,771 could send the natural gas towards $1,700. That said, the weekly support level underlined on the chart should be watched closely.
Written By: Mahmoud Alkudsi
Please feel free to contact me on Twitter: @Malkudsi
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.