Bulls Take Control: Natural Gas Rally Signals Strong Upward Momentum

Natural Gas Forecast Video for 08.01.24 by Bruce Powers

Natural gas is making a solid attempt to go higher today following weakness earlier in the session. It was able to hold support of yesterday’s low at 2.68, which led to a bullish reversal and rally above yesterday’s high of 2.86 later in the session. It is well positioned to continue higher heading into next week.

Well-positioned for Continued Strength into Next Week

Early session weakness was an opportunity for the bears to take the price of natural gas lower and it has failed. Buyers are back in charge with a bullish close after reaching the 127.2% extended target for a rising ABCD pattern. Natural gas is on track to close strong on both a daily and weekly basis as trading remains active near today’s highs at the time of this writing.

And it looks like a close above the 50-Day MA, now at 2.85, is likely. That would be an important technical confirmation towards further strengthening in the price of natural gas. In addition, on the weekly chart, today’s advance triggered a breakout above the 20-Week MA at 2.87. A strong close today will confirm that breakout as well.

Monthly Bullish Reversal Above 2.84 Sets a Positive Tone

Further, today’s candlestick pattern is a bullish hammer continuation pattern. A decisive breakout above today’s high provides the next bullish signal. The weekly chart also indicates higher prices are likely based on its structure. Natural gas is set to complete a wide range green candle this week with a close at or near the highs for the week. This would clearly confirm strength on a weekly basis. And to top it off we have the monthly chart. A bullish reversal on the monthly chart triggered this week on a move above 2.84 and it will be confirmed if this week closes above the breakout level.

The next higher target is the completion of an extended ABCD pattern at 2.90. It takes the change in price for the AB leg and multiplies it by the 127.2% Fibonacci ratio to arrive at a target for the CD leg of the pattern. Further up is the 50% retracement level at 2.94.