Natural Gas Price Forecast: Breaks Out of Double Bottom, Eyes Key Resistance Targets

Natural gas triggered a decisive bullish breakout of a double bottom pattern on Thursday as it rallied above the 2.30 swing high and kept going. It is on track to close strong, in the top quarter of the day’s range, as it continues to trade near the highs of the day at the time of this writing.

The highest price for the day was 2.39. Wednesday’s close was above the 200-Day MA and today’s advance confirms a breakout a breakout of the 200-day line natural gas has risen further away from the line. Also, the purple 20-Day MA is above the cross above the orange 50-Day MA, providing another sign of strengthening.

Double Bottom Breakout Triggers Above 2.30

Today’s advance completed a 38.2% Fibonacci retracement at 2.37, with the next price zone target zone from 2.47 to 2.54. The higher price level is the standard target for a rising ABCD pattern (purple). Included within the price range is the 50% retracement at 2.52. The double bottom pattern indicates a potential target from the breakout at 2.72.

That target is derived by calculating the measuring objective of the pattern. Two other targets are nearby creating a price range from 2.65 to 2.72. A 127.2% extended target for the rising ABCD pattern points to 2.65, and the 61.8% Fibonacci retracement is at 2.67. Moreover, a bullish reversal of the prior decline is further confirmed today as the 2.30 level was a swing high that was part of the downtrend price structure.

Reclaims 200-Day MA

Given the decisive breakout above the 200-Day MA today, and a likely strong close, the 200-Day line is key support during pullbacks. It is now 2.25. Of course, a test of support at the 2.30 breakout level (also a weekly high) is the first area to watch for support on weakness.

Top Trendline May Eventually Be Tested

Since natural gas has triggered a double bottom breakout and it is back above each of the moving average, there is the potential that it eventually retests resistance around the top downtrend line. That line is at the top of a large symmetrical triangle pattern. An internal symmetrical triangle is indicated by the internal uptrend line connecting the recent swing low (A). Once support is tested on one side of the pattern there is the possibility to eventually reach the other side. Currently, the 78.6% retracement at 2.89 can be used as a rough proxy for the top trendline.

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