Natural Gas Price Forecast: Bullish Signs Point to Potential Upside

Natural gas found support at a new retracement low of 2.64 on Monday before it strengthened intraday. The subsequent advance took the price of natural gas above Friday’s high of 2.77 thereby triggering a daily bullish reversal. At the time of this writing the high for the day was 2.83 and trading continues near the highs of the day.

Natural gas is on track to complete a key bullish reversal day today. Monday’s session began with an open below Friday’s 2.67 low and it was followed by an eventual breakout above Friday’s high. A daily close today above Friday’s high increases the chance for further strengthening in the price of natural gas.

20-Day MA Near-term Support

Further, the price area around the 20-Day MA, now at 2.79, has been defining resistance today. If natural gas can end today above the 20-Day line, it will be sending a signal that the retracement is likely over, and higher price levels again come into play. Note that natural gas closed below the 20-Day line for only the past two days. It had marked potential support since April 26 when natural gas previously rose above the 20-Day MA after being below it. A quick two-day recovery of the 20-Day MA is a bullish sign.

Bullish Signal on Breakout Above 2.95

Last week’s high of 2.95 marks an important price level for natural gas as it is a weekly high and a daily interim swing high. A decisive breakout above that price level will signal a bullish weekly reversal. Also, a rise above last week’s high will have recovered the downtrend line. From there natural gas should look to recover the recent trend high of 3.16 and then test higher target areas.

Rising ABCD Pattern Points to 3.32, if Bulls Take Back Control

An initial higher target is identified around 3.32. That price would complete a simple rising ABCD pattern or measured move. Once price symmetry is exhibited the chance to encounter resistance to some degree increases. That target is a little below the next higher price target around the January swing high at 3.39. It is confirmed by a 200% extended retracement target of 3.37.

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