Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Silver Notches Best Month Since 1979 - 12th Aug 20
Silver Shorts Get Squeezed Hard… What’s Next? - 12th Aug 20
A Tale of Two Precious Metal Bulls - 12th Aug 20
Stock Market Melt-Up Continues While Precious Metals Warn of Risks - 12th Aug 20
How Does the Gold Fit the Corona World? - 12th Aug 20
3 (free) ways to ride next big wave in EURUSD, USDJPY, gold, silver and more - 12th Aug 20
A Simple Way to Preserve Your Wealth Amid Uncertainty - 11th Aug 20
Precious Metals Complex Impulse Move : Where Is next Resistance? - 11th Aug 20
Gold Miners Junior Stcks Buying Spree - 11th Aug 20
Has the Fed Let the Inflation Genie Out of the Bottle? - 10th Aug 20
The Strange Food Trend That’s Making Investors Rich - 10th Aug 20
Supply & Demand For Money – The End of Inflation? - 10th Aug 20
Revisiting Our Silver and Gold Predictions – Get Ready For Higher Prices - 10th Aug 20
Storm Clouds Are Gathering for a Major Stock and Commodity Markets Downturn - 10th Aug 20
A 90-Year-Old Stock Market Investment Insight That's Relevant in 2020 - 10th Aug 20
Debt and Dollar Collapse Leading to Potential Stock Market Melt-Up, - 10th Aug 20
Coronavirus: UK Parents Demand ALL Schools OPEN September, 7 Million Children Abandoned by Teachers - 9th Aug 20
Computer GPU Fans Not Spinning Quick FIX - Sticky Fans Solution - 9th Aug 20
Find the Best Speech Converter for You - 9th Aug 20
Silver Bull Market Update - 7th Aug 20
This Inflation-Adjusted Silver Chart Tells An Interesting Story - 7th Aug 20
The Great American Housing Boom Has Begun - 7th Aug 20
Know About Lotteries With The Best Odds Of Winning - 7th Aug 20
Could Gold Price Reach $7,000 by 2030? - 6th Aug 20
Bananas for All! Keep Dancing… FOMC - 6th Aug 20
How to Do Bets During This Time - 6th Aug 20
How to develop your stock trading strategy - 6th Aug 20
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Natural Gas Price Forecast

Commodities / Natural Gas Mar 14, 2015 - 03:17 PM GMT

By: Austin_Galt


Natural gas has been absolutely pummelled for the last decade after making an all time high in 2005 at US$15.78. Price now sits around US$2.75. What a spanking!

So, does there look to be an end in sight to this devastating downtrend? Yes and no. Let's begin with the "no" which involves the big picture yearly chart.

Natural Gas Yearly Chart

We can see price has been smashed from that 2005 high which has caused immense misery for the bulls. The picture that flashes before me is the scene from Frank Herbert's 1984 movie Dune whereby Paul Atreides puts his hand in the pain box and exclaims, "The pain!" Well, the natural gas bulls are currently ensconced in their own pain box.

There looks to be a "three strikes and you're out" low setting up which consists of three consecutive lower lows. This is denoted by the numbers 1, 2 and 3. Now, due to the massive bear trend in play, consideration also needs to be given to a fourth strike which would really nail down the low if that were to occur. And this is the yearly chart, no less, so there still appears to be plenty of time left in this bear market.

The Relative Strength Indicator (RSI) is looking weak but the next low looks like it might set up a bearish divergence.

The Stochastic indicator is still trending down with a bearish bias so no joy there either for the bulls.

So where is the final low likely to be? Good question and I must admit to be quite unsure about that.

I have drawn a horizontal line denoting the 1992 low which stands at US$1.02. For now I favour the final low to be just above that level but it really would not surprise me to see price nudge a bit below.

I have added Bollinger Bands and price now looks headed for the lower band which is currently at 76c and rising slowly.

There still looks to be at least 3 years before we might start contemplating a low and that is probably underestimating how much longer this bear trend has left in it.

Let's now go to the "yes" which involves the weekly chart.

Natural Gas Weekly Chart

I have added a Fibonacci Fan and price looks to be finding support at the 88.6% angle. I often see price stage significant rallies off this fan angle and I think we are about to see that here.

The Parabolic Stop and Reverse (PSAR) indicator now has a bullish bias after price busted the dots on the upside a few weeks ago.

The RSI and Stochastic indicator are both showing a bullish divergence on the recent low while the Moving Average Convergence Divergence (MACD) indicator is showing a recent bullish crossover.

The Bollinger Bands show price has moved away from the lower band and is now just under the middle band. Sure, it is possible for price to break lower but that would likely see price bounce back up off the lower band.

So, the evidence is mounting that a decent rally is set to commence if it hasn't already.

The 100 period moving average (red) has just made a bearish crossover of the 50 period moving average (blue) however I often find price rallies after this event.

Assuming we have a low in place, I have added Fibonacci retracement levels of the move down from February 2014 high to February 2015 low. I favour price rallying up to around the 61.8% level at US$4.99 and perhaps a touch above which might also be around resistance from the 61.8% fan angle if the timing is right for a high around September this year. Let's see.

After the expected rally high, price should head back down as the overall downtrend once again asserts its authority.

Let's wrap it up with the monthly chart.

Natural Gas Monthly Chart

There looks to be a 5 point broadening low in play denoted by the numbers 1 to 5. Price looks to be tracing its way to the point 5 low but that may still be quite a way off.

I have drawn a trend line connecting the 2001 low with the point 1 low. I like trend lines like these that aren't obvious. Price is now down around this support line and I expect a bounce from here.

I have added moving averages with time periods of 100 (red) and 200 (black) and they have just made a bearish crossover with the red line crossing below the black line. As often happens after these bearish events, price then rallies back up to test the averages.

I have also added Bollinger Bands and I'd like to see the rally high be rejected around the upper band.

I expect any rally to be a bear rally with price the coming back down to eventually put in the point 5 low.

And there looks to be a good chance that the point 5 low will set up triple bullish divergences on the RSI and MACD indicator. That would be a promising sign for the bulls. But alas, that may still be several years away.

And once the final bear market low is in place, price will need to go up and bust the downtrend line connecting the 2005 and 2008 highs. That would indeed be thrilling for the bulls but once again I don't see that happening anytime soon.

Summing up, this bear market still has a lot of time to play out and quite frankly it just isn't a market I have any interest being involved in. Not yet anyway.

By Austin Galt 

Austin Galt is The Voodoo Analyst. I have studied charts for over 20 years and am currently a private trader. Several years ago I worked as a licensed advisor with a well known Australian stock broker. While there was an abundance of fundamental analysts, there seemed to be a dearth of technical analysts. My aim here is to provide my view of technical analysis that is both intriguing and misunderstood by many. I like to refer to it as the black magic of stock market analysis.

Email - 

My website is 

© 2015 Copyright  The Voodoo Analyst - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Austin Galt Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules