Natural Gas Price Forecast: Rallies to Nine-Day High, Breakout Signals Strength

Natural gas triggered a bullish reversal on Wednesday as it rose to a nine-day high of 3.40. Trading continues near the highs of the day at the time of this writing. Therefore, the day’s session may yet end with a new high. Today’s long range full bodied green candle shows resistance around the January 2024 swing high of 3.39.

It reflects buyers taking back control and likely remaining in control at the close. A new sign of strength will be indicated on a daily close above 3.39. Further, an uptrend line that had been marking resistance was reclaimed today, also a sign of strength if the close is above it.

Looks to be Heading Towards 3.56

Nonetheless, today’s price action leaves natural gas wide open for a test of resistance around the recent swing high of 3.56, and a likely rally above it. If that high is exceeded the next likely target is the 2023 high of 3.64. That high begins the top trendlines marking the boundary of a large symmetrical triangle pattern.

It is important to note that the extended target for a rising ABCD pattern (purple) completes there as well at 3.67. Further up is the completion of an extended rising ABCD target at 3.87. A key point to consider is that a breakout above 3.64 will further confirm a bullish reversal of trend that is still making progress.

Symmetrical Triangle Breakout Proceeds

Price action following the breakout of a triangle pattern on November 20 has been a textbook example of bullish behavior so far. Once the breakout triggered the first two initial targets from prior swing highs were exceeded. Subsequently, after the high of 3.56 was reached a two-week correction began before finding support around the initial triangle breakout area of 3.02 last week.

Bullish Above 20-Day MA

Regardless of the potential for upside follow-through, a drop below today’s support at 3.18 would be short-term bearish. The 20-Day MA is a little lower at 3.14. The expectation is for natural gas to continue higher from here but that may begin to change if the 20-Day line fails to retain support. After today, the internal uptrend line on the chart will be adjusted down to connect with last week’s low.

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