Natural Gas Price Forecast: Eyes Breakout as Support Holds and Trend Strengthens

Natural gas continued to consolidate on Thursday within a relatively tight price range. The range is defined by the high and low of Tuesday at 2.82 and 2.65, respectively. Given that there has been no upside follow-through from Monday’s wide-range key reversal day that bounced from a test of support at the 20-Day MA, maybe natural gas drops a little lower first. Also, notice that Wednesday ended with a weak close, in the lower half of the day’s trading range, and today is set to be the same.

If a deeper pullback occurs, then the key near-term support range to watch is from the recent interim swing high of 2.58 and the 20-Day MA at 2.545. Then, there is this week’s low, and the low of the key reversal day at 2.51, as well as the 50-Day MA at 2.52.

Possible Inside Week

Nonetheless, there is only one more trading day to the week and therefore natural gas will likely end the week with an inside week pattern. The high and low of the week will provide the pivot levels to watch heading into next week. Currently, the high for the week was 2.82 and the low was 2.51. Since natural gas has been increasing the number of bullish indications, the expectation is for an eventual upside breakout.

For example, the recent downswing the reversed from 2.21 support was a successful test of support at the 200-Day MA. In addition, once the swing low was established a new internal trendline shows the angle of ascent for the short-term advance, which has noticeably increased from the prior lower uptrend line.

Symmetrical Triangle Breakout May Be Getting Closer

The inside week pattern has the potential to see a strong breakout to the upside and begin a rally that triggers a breakout of a large symmetrical triangle pattern. The recent swing high of 3.02 is part of the swings that define the pattern. A breakout above there will trigger a breakout of the triangle, and a continuation of the rising trend that has delivered a higher swing low (C) but not yet a higher swing high. If natural gas can continue to strength following a breakout, then it has a chance at the first target zone from 3.35 to 3.45.

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