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Natural Gas Price Forecast: Eyes Upside Targets After Bullish Reversal Signal

By:
Bruce Powers
Published: Dec 17, 2024, 21:42 GMT+00:00

Natural gas shows a bullish reversal, targeting a breakout above $3.56, with higher levels at $3.85, $4.06, and $4.33 as momentum builds.

In this article:

Natural gas is on track to complete a bullish reversal day on Tuesday that could lead to higher prices. Earlier in the session it dropped to a new pullback low of 3.09 before finding support and spiking higher to exceed yesterday’s high. It continues to trade strong, near the highs of the day, at the time of this writing. Today’s momentum burst could be a sign of additional strength to come.

A screenshot of a graph Description automatically generated

Short-term ABCD Pattern Points to 4.33

Measured moves can be used from the nearby swings to identify an upside target from recent swings. On the chart it takes the form of an ABCD pattern. The pattern looks for price symmetry between the two advancing swings, AB and CD. Other larger patterns also identify other price target levels on the chart.

The pink ABCD pattern on the chart shows the closest swings. An initial target from this pattern is up at 4.33. That is a target well above the top of the recent symmetrical triangle at 3.64. It would align with the potential for a pickup in momentum following the triangle breakout.

Triangle Top at 3.64

Nonetheless, an initial upside breakout and bull trend continuation signal is triggered above the recent highs of 3.56. That would put natural gas well on its way to approaching the top of the triangle at 3.64. Certainly, bullish momentum has the potential to have natural gas bust right through that high and head towards higher targets. Higher targets, prior to reaching 4.33, would be around the 38.2% retracement at 3.85.

Potential Inside Week in Process

Although it continues to look like there is a good chance this week will end as an inside week, if it does it sets up for the potential of a weekly inside week breakout for next week. Further up from the 38.2% retracement is a extended target for a rising ABCD pattern (purple) at 4.06.

Also, let’s consider the 4.33 target along with other price levels. Looking at the chart can be seen that there is the confluence of several indicators starting from the 4.06 price level. The target price range goes to 4.39 and then 4.50, followed by 4.56. Resistance could be seen anywhere within that zone, if it is reached.

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About the Author

Bruce boasts over 20 years in financial markets, holding senior roles such as Head of Trading Strategy at Relentless 13 Capital and Corporate Advisor at Chronos Futures. A CMT® charter holder and MBA in Finance, he's a renowned analyst and media figure, appearing on 150+ TV business shows.

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