Natural Gas Price Forecast: Potential Bullish Breakout for Natural Gas Above $2.17

Natural gas weakened on Wednesday as it fell below Tuesday’s low yet remained within the trading range from Monday. Monday’s low was 2.09 and today’s low was 2.10. If it closes above 2.09 then a potential bullish setup will be established. There was one day of strong bullish momentum following Monday’s breakout above the internal downtrend line.

A wide range green candlestick with a strong close near the highs of the day’s range completed the day. The subsequent two-day pullback slowed the ascent as profit taking took hold, but natural gas retains a short-term bullish posture and is working on reversing the bearish retracement.

Breakout Above 2.17

A bullish breakout will be triggered on a decisive rise above today’s high of 2.17 and confirmed on a daily close above that price level. Natural gas should then be ready to test this week’s high of 2.27 and higher prices. The first area where resistance might be seen is around the 20-Day MA at 2.33. Notice that the 20-Day line is close to the higher downtrend line, which also marks dynamic resistance for the recent decline.

200-Day MA is a Target at 2.43

If natural gas can eventually rise above the downtrend line and stay above it, there it has a chance of reaching higher targets. The 200-Day MA would be next on the agenda, at 2.43 currently, while the 38.2% Fibonacci retracement is nearby at 2.45. Further, there is prior support and now potential resistance at 2.47. If those price levels can be exceeded to the upside, natural gas will likely test resistance around the 50-Day MA at 2.56 and the 50% retracement at 2.59.

Weekly Bullish Breakout Above 2.285

Last week’s high of 2.285 should also be watched as a rise above it will signal a bullish reversal in the weekly time frame. It would be the first time since the June peak of 3.16 that a prior week’s high had been exceeded and would be a key sign that strength is returning. A bullish weekly reversal would be confirmed on a daily close above last week’s high.

Also, this week’s price action is contained within last week’s price range. Since the week is more than half over there is a chance that it may end the week in the same position. If so, heading into next week, a bullish signal will be generated on a rally above this week’s high of 2.27.

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