Natural Gas Price Forecast: Bull Breakout Stalls at Resistance Zone

Natural gas rallied to a new trend high of 3.45 on Thursday before encountering resistance that led to an intraday pullback. Regular readers will notice that price as being the top of a previously identified initial target range for natural gas following a bull breakout yesterday above a prior swing high of 3.02 and a symmetrical triangle pattern.

Yesterday’s daily close above that price level confirmed the breakout. Further signs of strength were indicated by Wednesday’s close above a potential resistance zone from the swing high of 3.16. A second daily close above 3.16 is likely to happen today, further confirming strength of the breakout.

Initial Short-term Target Zone Reached

Initial targets from two rising ABCD patterns (orange, purple) were reached today, along the 127.2% extended target of a smaller ABCD pattern (light blue). That could lead to a deeper pullback to test support levels before natural gas is ready to proceed higher.

In addition, the 3.39 swing high from January was reclaimed. That swing high is part of the price structure of lower swing highs. Each time natural gas breaks out above a swing high it continues to show strength. Key levels to watch for support include the 3.16 swing high and the 3.02 swing high. A little lower is Wednesday’s low of 2.94, which is close to the top boundary line for the symmetrical triangle. Below there is the 20-Day MA at 2.82.

Pullback Should Find Support Above 3.02 if Bulls Remain in Charge

Nevertheless, if a pullback comes before a new trend high, it will likely be met with support that turns the price of natural gas back up. Yesterday’s bull breakout was potentially significant as several breakouts were triggered around the same time. So far, the bullish reaction following the initial 3.02 breakout is supportive of higher prices. A key upside target is the 2023 peak of 3.64. It makes up part of the downtrend structure. There are also a couple extended targets from the rising ABCD patterns around that level.

Triangle Pattern Points to 3.78

A decisive breakout above that peak would trigger a continuation of the developing uptrend and further confirm the breakout of the triangle pattern. The measure of the larger triangle, that includes the 1.52 swing low, points to a potential target of 3.78 when based on a percentage move. That is above the 2023 peak. When measuring the price distance, the target is around 4.93.

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