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Natural Gas Forecast Video for 03.04.23 by Bruce Powers
Natural gas (continuous contract) has been holding support of the recent lows from 2.00 to 1.97 and showing little sign of strength beyond that so far. Nevertheless, there are a couple items worth noting starting with the weekly candle for this week.
Weekly Candlestick Pattern Indicates Bullish Reversal Possible
As it looks now, natural gas will end the week with a bullish hammer candlestick pattern. This will setup a potential bullish signal on a move above this week’s high of 2.24. Note that the weekly candle is green for the first time in four weeks. A daily close above that high will then confirm the bullish signal thereby making it more likely to keep going.
Upside momentum should pick up at that point as a weekly signal generally is stronger than a daily signal. Following a weekly bullish reversal natural gas will first target Fibonacci retracement levels in the short-term as noted on the chart.
ABCD Pattern Upside Target
Nevertheless, a larger pattern kicks in once a weekly bullish reversal is confirmed. An ABCD pattern can then be watched. That’s where the price advance in the second leg up off the bottom matches the first leg. The first leg advanced by 53.9%. Natural gas will match that ascent in the second leg up at 3.08. That’s the first more significant first target in natural gas if a rally does confirm. If reached, at that point natural gas will be above the recent swing high of 3.03 when a double bottom bullish reversal pattern will trigger.
Price Extension Target
If we project the ABCD pattern by the 127.2% Fibonacci ratio we arrive at a second and higher target of 3.35. That second target is within a price zone identified by several Fibonacci levels, as well as prior price action (support/resistance). It identifies a price zone of potential resistance. That zone starts at 3.30 and goes up to 3.35. Support for a bullish outlook is seen in the 14-Day RSI momentum oscillator. It remained above the uptrend line as the pullback in price went lower.
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This article was originally posted on FX Empire
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