Charting Natural Gas: Eyes on 3.23 High, Potential for Further Gains

Natural Gas Forecast Video for 12.01.24 by Bruce Powers

Natural gas is holding steady as it trades outside day on Thursday following a second successful test of support at the 38.2% Fibonacci retracement earlier in the session. On Wednesday, natural gas closed right at support of the uptrend line and today it is on track to close well above the line and possibly at a new trend daily closing high. The prior closing high from Tuesday was at 3.19. Further, a close above yesterday’s high of 3.23 would provide additional evidence of underlying strength.

Despite 78.6% Fibonacci Retracement, Remains Within Tuesday’s Trading Range

Despite the completion of a 78.6% Fibonacci retracement on Tuesday and subsequent pullback, natural gas remains within Tuesday’s trading range and essentially above the uptrend line. This is a sign of strength, yet it has gotten extended and is due for a correction. The rally that began from the 2.24 swing low (C) hit a high of 2.88 on Tuesday thereby completing a 1.16 or 49.8% advance in just a short 17 days.

Breakout Above 3.23 Signifies Strength; Potential Resistance at 3.34-3.39

A breakout above today’s high of 3.23 will be a sign of strength but it won’t be clear yet whether it can keep rising. Resistance may again be seen around the 3.34 to 3.39 price areas, consisting of the 78.6% Fibonacci retracement level and the trend high. Nevertheless, there are higher prices on the horizon once natural gas is ready to progress.

Symmetry Expected at 3.92, Mirroring Previous 87.2%Aadvance

The primary higher target as shown on the chart is around 3.93. That would complete a large rising ABCD pattern encompassing all the price action following the trend low of 1.95 in April of last year. At 3.93 there will be symmetry or similarity between the two upswings within the ABCD pattern. Natural gas advanced by 1.70 or 87.2% from the April trend low (A) to the October trend high of 3.64 (B).

A similar distance in price will occur at 3.92 when starting from the recent swing low at 2.235 (C). Whether it gets there and how it will get there if it does, remains to be seen. Further, and of significance, the 23.6% Fibonacci retracement, which is the minimum measured in Fibonacci analysis, will be hit at 3.85.

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