Natural Gas Price Forecast: Price Stability Signals Support

Natural gas prices remained relatively stable on Friday, up for the day and reaching a high of 2.14, which exceeded yesterday’s high. However, it remains in a downtrend and the past two days of price action are contained within Wednesday’s one-day trading range. Resistance for the day was seen at the internal downtrend line. That line marks the first line of resistance for the current bearish retracement.

Bear Trend Remains Dominate

The bear trend can be expected to continue until there are signs that sentiment is starting to change. Certainly, having found support at this week at a low of 2.015 shows potential for a bullish reversal but there are no signs of it yet. Given the current price pattern natural gas would need to rise above 2.21 and stay above it for an indication of strength that may be sustainable for at least a few days. If that happens a test of the 200-Day MA as resistance is a likely target as it is also marked by several other indicators. The 200-Day line is now at 2.44.

Above 2.21 Shows Strength

A rally above 2.21 would also put natural gas well above the internal downtrend line, a sign of strengthening. That would make the higher trendline a target. Notice that the purple 20-Day MA has converged with the internal trend line, and they are identifying a similar area of price. The 20-Day line is now at 2.41. That would put the target of the 20-Day MA slightly below the 200-Day line, as it is now. There are several other indicators identifying a similar price area as the 200-Day MA. Together, they create a potential resistance zone from 2.44 to 2.62.

Minor Bullish Sign in Weekly Chart

Natural gas is about to complete its fifth week in a row with lower weekly lows and lower highs. Also, this week it is on track to close at the highest price relative to the week’s trading range. In other words, relative to the week’s range, this week is set to close stronger than the prior five weeks. Not a big deal, but rather a small indication that natural gas is seeing some support off this week’s lows.

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