Natural Gas Price Forecast: Bullish Reversal Signals Further Upside Potential

Natural gas held up well on Thursday given global market turmoil following a new announcement on tariffs from the U.S. It looks like a bearish pullback low was established at $3.93 this week, as a bullish reversal of an inside day triggered on Thursday. Subsequently, a three-day high of $4.20 was reached before an intraday pullback began.

The bullish one-day reversal also reclaimed the 20-Day MA at $4.07. A daily close above Wednesday’s high of $4.09 will confirm the bullish reversal, and a daily close above the 20-Day line will confirm that breakout. Although weakness followed the daily high, natural gas continues to trade in the top half of the day’s trading range defined by the $4.09 midpoint.

Bullish Price Action

Today’s price movement indicates a possible continuation of the upward trend that originated from the March 27 swing low of $3.73. Since a lower swing high was established at $4.26 in March, that is the next price target for natural gas. However, a bull breakout above that swing high will trigger a continuation of a bull trend and a bullish reversal of the recent declining price correction. Each signal would provide another piece of technical evidence showing Improving demand for natural gas.

Confluence Target at $4.56

If bullish momentum can now be sustained, there is an initial upside target for natural gas around $4.56. That price level is identified by two methods. It is a 61.8% Fibonacci retracement level, and it marks the initial target for a rising ABCD pattern. When two or more indicators point to a similar price level, that price area can sometimes act like a magnet, pulling price towards it. Whether that happens with natural gas or not remains to be seen. But it certainly could happen.

On Track for Bullish Weekly Candle Pattern

Since there is only one more trading day left to the week, natural gas looks likely to end the week confirming a one-week bullish reversal that triggered this week on the weekly chart. A weekly close above last week’s high of $4.10 would confirm the breakout on the larger time frame. Also, there is a possibility that the one-week pattern this week will be a hammer candlestick pattern. However, in its current pattern position, it would represent upward momentum rather than the potential for a bullish reversal, as a bullish reversal already triggered.

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