Natural Gas Price Forecast: Eyes Bullish Continuation as 200-Day Support Holds Strong

Natural gas may have completed a one-day pullback on Monday as it fell below Friday’s low earlier in the session before finding support at 2.265 and reversing. That low was a little above the 200-Day MA, which is at 2.24. The 200-Day line is a key near-term support marker for the developing uptrend. Following the 2.265 bottom today, buyers took back control as the price of natural gas advanced to a high for the day at 2.40.

That put it in the green for the day and in a position to close strong, in the top third of the day’s trading range. Furthermore, at the time of this writing, natural gas is set to close at its highest daily closing price for the current advance. That, along with today’s successful test of the 200-day line as support, would be a sign of strength.

Stalled at 38.2% Retracement Zone

Last Thursday, natural gas hit a high of 2.39 and completed a 38.2% Fibonacci retracement at 2.37. It stalled around that price area and hit a high for the trend of 2.41 on Friday. Therefore, a rally above 2.41 will trigger a bull trend continuation with the 50% retracement zone at 2.52 looking to be next on the agenda. That target can be combined with the initial target from a rising ABCD pattern (purple) at 2.54 (D).

Rising ABCD Pattern Points to 2.65

A bottom was found at 1.875 a few weeks ago and it was followed by a rally and subsequent two-day pullback. That pullback is the BC leg of the ABCD pattern and reflects strong demand as a bullish reversal occurred off a 38.2% Fibonacci retracement, rather than a deeper retracement. An extended target using the 127.2% ratio begins the next higher target zone from 2.65 to 2.72. The top of the range is an initial target from the double bottom pattern that was broken out of last week.

Strong Close Improves Confidence

If today ends strong, it will be an indication that the double bottom breakout is able to follow through to the upside. The breakout level at 2.30 and the price area around the 200-Day line were previously resistance and now further identified as support. But the new daily high close is also a strong clue pointing to a continuation higher for natural gas.

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