Natural Gas Price Forecast: Rallies Towards Bullish Breakout, Testing 200-Day MA

Although natural gas dipped below Monday’s low earlier in Tuesday’s trading session, it subsequently bounced off support around the 20-Day MA from the day’s low of 2.15. Buyers subsequently took back control and drove the price of natural gas above yesterday’s high thereby creating an outside day.

The outside day is set to close strong, in the top third of the day’s trading range and in the green. Resistance was seen at the high of the day of 2.26, which provided another test of resistance at the 200-Day MA.

Second Rise Above 200-Day Moving Average

Last week natural gas exceeded the 200-Day MA and closed above it for the first time in 10 weeks. That set the stage for further strengthening. Another breakout above the 200-Day, now at 2.25, that is retained, prepares natural gas for a breakout from a bullish double bottom pattern. Notice that today’s advance exceeded the 200-Day line but at the time of this writing, natural gas is trading below the line and not on track to close above it.

Waiting Breakout of Double Bottom

A bull breakout of a double bottom pattern will trigger on a decisive rally above 2.30. That will also confirm a bull continuation of the developing uptrend as a violation of the 2.30 swing high presents a higher swing high and that goes with an uptrend. Also, the purple 20-Day MA is close to crossing above the orange 50-Day MA. A bullish crossover of the 20-Day line above the 50-Day line will confirm underlying strength in the price of natural gas and supports the likelihood of a rise to higher targets in the near term.

Pattern Points to 2.72

Following a double bottom breakout natural gas heads towards the target from measuring the pattern at 2.72. And eventually it may be heading towards a potential test of resistance around the downtrend line. The line is close to the 78.6% retracement level at 2.89. It marks the second higher potential target price zone following a breakout of the double bottom pattern. The first resistance zone following an upside breakout is likely from 2.47 to 2.52, consisting of a prior interim swing low and the 50% retracement, respectively.

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