Natural Gas Weekly Technical Outlook

Nymex Natural Gas (NG)

Natural gas's fall from 5.007 extended further last week and the break of 4.288 support confirms that whole decline from 5.196 has resumed. Initial bias remains on the downside this week and deeper fall should be seen towards 3.81 key support level. On the upside, above 4.375 will turn intraday bias neutral and bring recovery. But after all, another fall will remain in favor as long as 5.007 resistance holds.

In the bigger picture, the main question remains on whether Natural gas's fall from 6.108 is finished at 3.71 already as it just drew strong support from 61.8% retracement of 2.409 to 6.108 at 3.822. We'll stay neutral first. On the downside, break of 3.81 will revive the case that whole medium term rebound from 2.409 is finished at 6.108 already and will bring even deeper fall to retest this low. On the upside. Though, note that break of 5.007 will argue that rise from 2.409 is not finished yet and will extend for making another high above 6.108 before completion.

In the longer term picture, while the bounce from 2.409 was strong, it's been limited below 55 months EMA (now at 5.892) and reversed. The failure to sustain above 55 weeks EMA (now at 4.651) also argue that 2.409 might not be the bottom yet. We'll stay bearish as long as this year's high of 6.108 holds and favor a new low below 2.409 going forward.

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