Natural Gas Price Forecast: Eyes 200-Day Support Amid Weak Close

Natural gas pulled back further from Tuesday’s new trend high of 2.44 on Wednesday. If it closes below Tuesday’s low of 2.31, and it looks like it might, it may be signaling a drop to test support around the 200-Day MA, now at 2.24. The 200-Day line had been acting as trend resistance for about 10 weeks up until last Wednesday.

If natural gas stays above the 200-Day line, that would further indicate improving demand. At the time of this writing natural gas looks set to close weak for the day, near the lows for the day.

200-Day Line is Key Support

If the 200-Day line fails to hold as support, there is a price range from 2.19 to 2.15, represented by the 20-Day and 50-Day MAs, respectively. The 20-Day line recently moved back above the 50-Day line, which is a sign of strength. Therefore, support needs to be seen at or above the 20-Day line for confirmation of strength. For the overall bullish outlook for natural gas to remain, it needs to stay above the 50-Day MA on a daily closing basis. Otherwise, a deeper correction may be in the works. Also, the time to recovery and potential new rally highs would be extended.

Monthly Bullish Reversal is Active

Natural gas triggered a monthly bullish reversal earlier this month as it broke out above the August high at 2.30. That price level also marks a swing high and the neckline of a bullish double bottom pattern. The breakout occurred last week, and natural gas has been testing the breakout area as support since. A daily close above 2.30 confirmed the bullish breakout last Thursday. Once the current short-term consolidation phase is complete, higher targets remain likely to be approached.

Bullish Continuation 2.44

A bullish breakout will next be signaled on a move above 2.44. Higher target zones are from 2.52 to 2.54, followed by 2.65 to 2.72. The 2.72 price target is derived from the size of the double bottom. Also, within the higher price zone is the 61.8% Fibonacci retracement at 2.67.

Regardless of the potential higher targets, natural gas has been tracing out of a symmetrical triangle pattern for several months and recently reversed higher from the bottom. That puts the upper trendline line in play as a potential eventual target.

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