Natural Gas Price Forecast: Advances Toward Potential Bullish Breakout from Double Bottom

Natural gas remains poised to test the 50-Day MA around 2.22 as resistance, as the uptrend remained constructive today, Tuesday. The day’s low at 2.075 was part of a decline back below the 20-Day MA and below Friday’s low of 2.09. Support was subsequently seen off that low, leading to a bounce and recapture of Friday’s high at 2.17. Tuesday’s high was 2.20 and natural gas continues to trade near the highs of the day at the time of this writing, and therefore the highs of the current short-term advance.

50-Day Moving Average May Mark Resistance

The 50-Day MA begins an initial resistance zone rising to the most recent swing high of 2.30. That is also the monthly high for August. In between the 50-Day line and swing high is the 200-Day MA at 2.27. If natural gas can rise above the swing high, it will trigger a bullish breakout of a double bottom pattern.

A daily close above that high will confirm strength of the breakout and opens the door to higher prices. The 38.2% Fibonacci retracement is an initial target above the recent swing high and it is followed by a price zone starting from a prior interim swing low at 2.475 and the 50% retracement level at 2.52.

Trading Inside Large Symmetrical Triangle Formation

Since natural gas is trading within a large symmetrical triangle pattern another test of the top trendline and top of the triangle is eventually possible. The 50% retracement would need to be exceeded first, and it is followed by the 61.8% Fibonacci retracement at 2.67. Higher up is the 78.6% retracement at 2.89. These retracement areas can be used as a guide keeping in mind that since the slope of the trendline is declining it represents lower prices as we move forward in time.

Weekly Breakout Triggered

A bullish breakout above last week’s high of 2.17 triggered today and natural gas is on track to close above that price level. This is bullish price action that supports a continuation of the advance to test higher potential resistance levels. The first area to watch will be the interaction with the 50-Day MA. Either resistance is seen around that price area, or a bullish breakout occurs. There is also the double bottom target at 2.72 to be aware of.

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