Natural Gas Price Forecast: Faces Bearish Break Below Key Support Levels

Natural gas dropped hard on Friday, falling below both an internal uptrend line and 20-Day MA before finding support at 3.33. Sellers remained in control at the time of this writing, with trading continuing near the lows of the day. The low currently was 3.33. Therefore, natural gas may end the day and therefore the week, in a bearish position below both lines. Lower prices levels may then be targeted if that happens.

Sellers Regain Their Footing

Today’s decline puts the near-term rising trend structure at risk of being violated. Dynamic support is represented by the internal uptrend line and 20-Day line. Notice that since the 20-Day MA was reclaimed on October 29 there have been no daily closes below the line, even though intraday trading did occur below the 20-Day line.

If natural gas closes today below the 20-Day MA, it will show a change in character. This would put the 2.29 recent swing low at risk of being busted. That would then signal further weakness and increase the chance of the 50-Day MA, now at 3.13, being tested as support.

50-Day Moving Average Support is Key

The 50-Day MA is more significant than the 20-Day MA, particularly since it shows potential support above the top boundary line of a large symmetrical triangle pattern. In addition, it is above the most recent swing low at 2.98. That swing was the first test of a prior resistance area related to the triangle formation.

It is also part of the larger trend structure of higher swing highs and higher lows, that began from the October swing low. It also resides around the initial triangle breakout trigger of 3.02. Now that the top boundary lines have fallen further, it also needs to be considered as a potential support if it approached.

Bearish Weekly Chart to Complete

In addition to bearish signs on the daily chart, the weekly chart (not shown) also looks ominous and shows bearish momentum. A bearish shooting star candle will complete today, with a likely close near the lows of the week. Further, this week’s pattern includes a long tail, derived from the bearish reversal off the top rising trend channel line (circled).

In other words, this week is the result of a bearish reversal from the top of the trend. It is supportive of a continuation lower. Nonetheless, a new bearish weekly signal will not be given unless there is a drop below this week’s low and the sellers retain control.

For a look at all of today’s economic events, check out our economic calendar.