Natural Gas Price Forecast: Bearish Momentum Drops Price Below 50-Day Moving Average

Bearish sentiment impacted the price of natural gas on Tuesday as it fell to a new pullback low of $3.80 and generated a lower day low and lower high for the fourth day in a row. Despite an attempt over the prior two days to retain support around the 50-Day MA, now at $3.88, a breakdown triggered today instead. And there is a possibility that the bearish move is confirmed with a daily close below the prior pullback low at $3.86. Trading continues in the lower half of the day’s trading range at the time of this writing and below last week’s low.

Bearish Signal on Weekly and Daily Charts

Tuesday’s decline triggered a bearish continuation on both the weekly and daily charts. It establishes that the bears are in charge and therefore lower prices seem likely before the bearish correction is complete. Next up is a test of support around the recent interim swing low at $3.74 from early-March. Notice that the 61.8% Fibonacci retracement level is near the swing low at $3.72. Therefore, it should be included in the potential support zone. But given the weekly bearish signal that price zone may be exceeded to the downside.

Lower Targets

Lower targets are established by the lower uptrend line showing dynamic support. Also, there is an early target for a falling ABCD pattern at $3.52. That is the 78.6% harmonic target for the pattern. It shows a price decline in the CD leg of the pattern that is 78.6% of the price depreciation seen in the first leg down, labeled AB. The 78.6% target can be referenced along with prior resistance from late last year at $3.56. The price range is highlighted in green on the chart.

Above $3.99 May Reach 20-Day MA

If short-term strength is seen on a rally above today’s high of $3.99 the 20-Day MA is a key resistance level to watch. It helped define trend support on the way up and now resistance on the way down. Notice that it turned down recently. There was a successful test of support at the 50-Day MA during the prior swing low in early-March. That followed an initial test of the line as support after the reclaim of the line in mid-February. This would seem to indicate that a drop below the 50-Day line has some significance in the short term.

For a look at all of today’s economic events, check out our economic calendar.