Natural Gas Price Forecast: Poised for Bullish Continuation After Trend High

Natural gas triggered a potential upside continuation on Wednesday as it rallied to a new trend high of 2.276 before pulling back intraday. It is set to complete a higher daily high and higher low following an attempt at a bearish retracement that began yesterday. A daily close above Tuesday’s high of 2.24 will confirm the advance.

At the time of this writing natural gas is at risk of closing relatively weak, near or below the halfway point of today’s trading range. Nonetheless, today’s price action is a sign of strength as buyers took back control after a one-day pullback. And support was found before a test of the 20-Day MA, now at 2.095.

Watching for Further Signs of Strength

It remains to be seen however whether today’s bullish price action will lead to a continuation higher. Support around the 20-Day line may yet be tested. A daily close above today’s high will be needed to confirm a bullish continuation. That will put natural gas in a position to test resistance around the 38.2% Fibonacci retracement at 2.37.

A little higher up is the 50-Day MA at 2.41. It is sloping down and yet may converge with the 38.2% price area before being reached. A daily close above the 50-Day line will then be needed to confirm a bullish breakout above the line. This would be the first test of the 50-Day MA as resistance since natural gas fell below the line in early-July.

Weekly Breakout Supportive of Higher Prices

Earlier this week natural gas broke out above last week’s high of 2.19. And it has continued to strengthen with little retracement into last week’s price range. This is a sign of strength on the longer time frame chart and is supporting evidence for a test of the 50-Day MA. The weekly breakout will be confirmed if natural gas closes above last week’s high on Friday.

Setting Stage to Challenge Trendline

The rally off last week’s low of 1.88 has the potential to eventually test resistance at the top trendline and possibly breakout above the line. There is a rising ABCD pattern that reaches price symmetry between the two legs of the pattern at 3.46. That is the initial target from the pattern. And of course, if reached it would put natural gas above its trendline as well as the most recent swing high of 3.16 (B).

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