Natural Gas Price Forecast: Eyes Rally Amid Support at 200-Day Moving Average

Natural gas looks to have found support around the 200-Day MA on Monday, following a dip below the line to the day’s low of 2.21 earlier in the trading session. Subsequently, buyers took back control and drove the price of natural gas up to a high of 2.35 for the day. The 200-Day MA is a key indicator for the strength or weakness of the long-term trend. It is currently 2.25. Natural gas looks to be trying to establish. The area around the 200-Day MA is a critical zone of potential support.

200-Day Shows Solid Support

This is the first real test of the support around the 200-Day MA since the line was reclaimed in early-September. So far it is holding but there needs to be further signs of strength to indicator potential bottom for the decline. After today’s close, a rally above today’s high of 2.35 will provide a daily bullish reversal signal. Natural gas would then be looking to test resistance around the 50-Day MA at 2.39 and last week’s high at 2.63.

Recapturing 50-Day Line Shows Strength

If the 50-Day line can be recaptured the 2.44 prior trend high will be next on the agenda. The 38.2% retracement is up at 2.52 and it provides a good initial upside target if signs of strengthening continue. Subsequently, the 50% retracement is at 2.62, while potential resistance around the 20-Day MA is at 2.66. Given the recent sharp decline of 0.81 points or 26.8% in only eleven days, a counter-trend rally may also experience enthusiasm

Bullish Reversal on Move Above Today’s High

It is not yet clear whether today’s low will complete the bearish retracement and prepare natural gas for a buying phase. Further tests of support around the 200-Day MA may be forthcoming in the following days. But if natural gas does not close below the 200-Day line and stays above today’s low of 2.21, it will have a good chance at a counter-trend rally. It remains within a large developing symmetrical triangle pattern that reflects the contraction of swings in natural gas. Another test around the top line of the pattern could occur if a bullish reversal triggers and it is followed by higher prices.

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