Natural Gas Price Forecast: Bullish Reversal Triggers Amid Downtrend

Natural gas triggered a bullish reversal on Tuesday on a breakout of Monday’s hammer candlestick pattern. The breakout triggered above 1.97 and put natural gas on track to test initial resistance levels within the downtrend. A high of 2.03 was reached today, putting the price of natural gas at a three-day high. Since it remains in a downtrend, higher prices must be reversed before there are sustainable bullish signs. Nonetheless, natural gas will complete a higher daily high and higher daily low today.

Initial Resistance at 2.11

Initial resistance levels start with the 20-Day MA at 2.11. However, the most recent interim swing high of 2.15 carries greater significance as it makes up part of the downtrend price structure of lower swing highs. A rise above 2.15 opens the door to the next higher interim swing high of 2.27. Once there is a rise above daily close above the 20-Day MA natural gas will be showing indications of a bullish reversal. Further signs of strength will then be needed.

Potential Bullish Falling Wedge

An enhanced view is provided once a falling bullish wedge is identified on the chart. The pattern is bordered by two orange trendlines. It is a bullish pattern as it shows sellers becoming exhausted, which creates space for buyers to take back control. Nonetheless, a breakout trigger would be needed. That is provided on a rise above the top boundary line of the pattern. There are a couple things to be aware of regarding this pattern in natural gas. First, a bullish breakout should be accompanied by strong bullish momentum. Enough to quickly break above the 20-Day line.

Also, the wedge pattern may not be done forming. There may be more of the pattern to complete before a bullish breakout is ready to trigger. If so, natural gas could fall to its next lower target zone that begins at 1.85 yet maintain the parameters of the falling wedge. The lower target zone is identified down to 1.80. If today’s bullish reversal fails before another bullish reversal is triggered, then natural gas is likely heading to the lower price zone before the correction is over.

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