close icon

Natural Gas: The Rally Continues… For Now

It has been only a week since our last update on natural gas, but what an eventful week it was. On September 27th, the price was hovering around $2.99, following a recovery from $2.759 to as high as $3.088. The Elliott Wave Principle, which had previously put us ahead of that rally, this time suggested that natural gas prices might face resistance near $3.100. Once the bulls reach this mark, at least a small three-wave pullback back to $3.000 was supposed to occur.
Natural gas prices Elliott wave analysis
The rally from $2.704 to $2.996 was a perfect five-wave impulse, followed by a simple A-B-C zigzag. Therefore, the rally from $2.759 was also supposed to evolve into a complete five-wave pattern before the bears reappear.

Natural gas completed the five-wave pattern at $3.134 the same day and then fell to $2.999 on September 28th. The odds of it declining further or rising were even at the time. Apparently, the market chose the latter. As of this writing, natural gas is trading slightly above $3.26, so it is time to take another look.
Natural gas price Elliott wave trading
It is true that the anticipated pullback was much smaller than we expected – wave 2. The five-wave rally from $2.759 to $3.134 turned out to be only wave 1 of a larger impulse, which we believe is still in progress. The same logic applies: wave (3/C) needs to form a complete impulse, before the next notable pullback.

Right now, wave 3 is still under construction and waves 4 down and 5 up are missing, so the bulls remain in charge for now. $3.400 looks like a reasonable target. On the other hand, the theory states that every impulse is followed by a three-wave correction in the other direction. One can never know exactly how deep that correction will be, but once wave 5 of (3/C) is over, we should be ready for one to occur. The depth of the pullback will be up to the market to decide.

Did you like this analysis? Our Elliott Wave Video Course can teach you how to uncover similar opportunities yourself!

Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

Natural Gas Price: Is the Rally Over?

Two weeks ago, on September 13th, the price of natural gas was hovering around $2.83, following a decline from as high as $2.996. Fortunately, the Elliott Wave Principle helped us recognize the fact that the recent weakness was nothing more than a temporary pullback within a larger bullish setup. So instead of joining the bears…

Read More »

Natural Gas Price Headed for the $3 Mark Again?

The price of natural gas fell to as low as $2.704 on July 19th, before recovering to $2.996 on August 21st, only to decline again to $2.759 on September 10th. As of this writing, natural gas trades at $2.850, but in order to find out what to expect from now on, we have to take…

Read More »

Copper’s Selloff Not a New Bear Market

Copper fell by over 58% between February 2011 and January 2016. By late-2017 it looked like the commodity was finally out of the woods as the price rose to almost $3.30. Analyst were already anticipating even higher prices driven by an increased demand by the electric vehicle manufacturers and China’s economic growth. Alas, the market…

Read More »

Copper Facing a Correction Within Uptrend

The price of copper climbed to 2.9154 yesterday as it continues the impressive recovery from the low at 1.9322 in January, 2016. Copper prices are vitally important not only to mining companies like Freeport-McMoran, but to the world economy, as well. It is true the metal has gained over 50% in value in just a…

Read More »

Price of Palladium at a Critical Juncture

It has been a slow and choppy advance, but the price of palladium somehow managed to climb from as low as $450 in January, 2016, to $818 as of this writing. This means that an investment in palladium would have returned nearly 82% since the start of last year. However, the past is not always a…

Read More »

Ethereum Ready for a Pullback?

Less than two years since its launch on July 30, 2015, ethereum has already become the second largest cryptocurrency in the world, with a market capitalization of roughly $4.5 billion, trailing only to bitcoin’s $20 billion. We are definitely not the people to ask how exactly the blockchain technology works, but ethereum’s decentralized nature means its price…

Read More »

NZDUSD: Interpreting the Recent Shine Loss

NZDUSD has been rising during the last month and a half, but lost its shine recently by dropping from 0.7374 to as low as 0.7155 in just five trading days. As always, the main question is where is the pair going to from now on? If you do not want to blindly follow the herd,…

Read More »

More analyses