Natural Gas Price Forecast: Long Term Bullish Reversal Triggers

Natural gas spiked above the October 2023 swing high of 3.64 on Friday before finding resistance around the top rising parallel channel line. The day’s high at the time of this writing was 3.83. Although there was an intraday pullback following the 3.64 high, natural gas continues to show strength as it remains within the top third of the day’s price range.

The breakout above the 3.64 high has been decisive and shows strong momentum. It further confirmed the upside breakout of a large symmetrical triangle pattern that triggered on November 20. A strong closing price to end the week relative to the day’s price range may point to a continuation higher heading into the next week. Moreover, a close today above 3.64 is needed to confirm the bullish breakout.

Long-term Bullish Reversal

Today’s high was very close to completing a 38.2% Fibonacci retracement of an interim downswing, at 3.85. That price level is joined by 3.87, which is the 127.2% extended target for a rising ABCD pattern (orange). Together, they create a potential resistance zone from 3.85 to 3.87. The 38.3% long-term Fibonacci target was established following the February 2024 bottom.

Nonetheless, the breakout above the 3.64 swing high produces a bullish trend reversal signal on the larger time frame. The larger price patterns have greater potential significance. Therefore, the possibility of a more aggressive rally in natural gas increases following a daily close above 3.64. Since it is Friday, this would also produce confirmation on the weekly time frame.

Higher Targets Move into View

What looks interesting is that there is only an interim target identified if the 3.87 price level is exceeded. A smaller rising ABCD pattern (purple) shows a 161.8% Fibonacci extended target for the CD leg of the pattern at 4.06. From there the next potential upside target looks to be up at 4.33. Another smaller rising ABCD pattern (red) targets 4.33, its initial 100% target. Nonetheless, in the shorter term a pullback is always a possibility.

Watch Monthly Chart Closing

In addition to today’s long-term bullish trend reversal signal, natural gas has a chance of confirming the bullish trend reversal signal on a monthly chart by ending the year above 3.64. That would confirm the bullish reversal on the monthly time frame. An initial long-term target is up at the 38.2% Fibonacci retracement level measuring the full downtrend that began from the 2022 high.

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