Natural Gas Price Forecast: Breaks 20-Day MA, Eyes Stronger Resistance Ahead

Natural gas advanced slightly above Wednesday’s high on Thursday, reaching a high of 2.15. It generated a higher daily high and higher low and continues to trade near the highs of the day at the time of this writing. Today is set to end with natural gas closing above the 20-Day MA for the first time in six days. By recapturing the 20-Day line natural gas is showing strength and a recovery from this week’s low, and a slightly new trend low of 1.875.

Resistance Zone from 2.24 to 2.30

There are several initial upside targets for the bounce defined by a top price of 2.30 and starting with the 50-Day MA at 2.24. Within the price range is the 200-Day MA at 2.28 and the interim swing high of 2.27 from July 22. Be aware that as of this week’s low natural gas is forming an expanding triangle pattern.

The two boundary lines of the pattern are purple on the chart and point away from each other. This means that a breakout above the 2.30 swing high may see difficulty in following-through if natural gas subsequently finds resistance a little higher around the rising top line of the triangle.

Daily Close Above 200-Day Line Should Complete Bottom

Nonetheless, a daily close above the 200-Day line should put natural gas in a bullish position to approach higher potential targets, the first being the 38.2% Fibonacci retracement at 2.37. If that level can be surpassed the 50% retracement zone at 2.52 becomes the next higher target beginning with the interim swing low of 2.48 from May.

Trading Inside Large Symmetrical Triangle Pattern

Natural gas has been forming a large symmetrical triangle pattern since the April bottom. If it continues to strengthen, an eventual test of resistance at the top line of the triangle is likely. The 78.6% retracement at 2.89 can be used as a proxy for now. However, a little lower and above the 50% retracement is another potential resistance zone at 2.67 as that price would complete the 61.8% Fibonacci retracement.

Be aware that since natural gas is trading inside a consolidation pattern in the form of an expanding triangle, it is subject choppy trading until a decisive breakout of the pattern occurs.

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